APPELATE BANKRUPTCY Chapter 7 Chapter 13 FAQ - Bankrutpcy COMMERCIAL DUI/ DWI/ Traffic Offenses FAQ - DUI/ DWI LEGAL MALPRACTICE MEDICAL AND HOSPITAL LIABILITY MUNICIPAL May a Person Keep Property in Bankruptcy? With a chapter 7 bankruptcy, a person can keep "exempt" property from the claims of creditors. In Michigan, MCL 600.5451 lists the exemptions that are available to a bankruptcy filer. (If you moved to Michigan from a different state within two years before your bank¬ruptcy filing, you may be required to use the exemptions from the state where you lived just before the two year period.) In some states such as Michigan, you are given a choice when you file bankruptcy between using either the state exemptions or using the federal bankruptcy exemptions. If you are allowed to use the federal bankruptcy exemptions, they include: $20,200 in equity in your home; $3225 in equity in your car; $525 per item in any household goods up to a total of $10,775; $2,025 in things you need for your job (tools, books, etc.); $1075 in any property, plus part of the unused exemption in your home, up to $10,125; Your right to receive certain benefits such as Social Security, unemployment compensation, veteran's benefits, public assistance, and pensions regardless of the amount. The amounts of the exemptions are doubled when a married couple files together. Again, you may use the State of Michigan exemptions which may be more or less generous than the federal exemptions. Michigan law, MCL 600.5451, which was enacted in 2005, has a more extensive and different list of exemptions which are: (a)  All of the following: (i)   Family pictures. (ii)  Arms and accoutrements required by law to be kept by a person. (iii)  Wearing apparel, excluding furs. (iv)  Cemeteries, tombs, and rights of burial in use as repositories for the dead of the judgment debtor’s family or kept for burial of the judgment debtor. (v)  Professionally prescribed health aids. (b) Provisions and fuel for comfortable subsistence of each householder and his or her family for 6 months. (c) The interest, not to exceed a value of $475.00 in each item and an aggregate value of $3,200.00, in household goods, furniture, utensils, books, appliances, and jewelry. (d) The interest, not to exceed $525.00 in value, in a seat, pew, or slip occupied by the judgment debtor or the judgment debtor’s family in a house or place of public worship. (e) The interest, not to exceed $2,125.00 in value, in crops, farm animals, and feed for the farm animals. (f) The interest, not to exceed $525.00 in value, in household pets. (g) The interest, not to exceed $2,950.00 in value, in 1 motor vehicle. (h) The interest, not to exceed $525.00 in value, in 1 computer and its accessories. (i) The interest, not to exceed $2,125.00 in value, in the tools, implements, materials, stock, apparatus, or other things to enable a person to carry on the profession, trade, occupation, or business in which the person is principally engaged. (j) Money or other benefits paid, provided, or allowed to be paid, provided, or allowed, by a stock or mutual life, health, or casualty insurance company because of the disability due to injury or sickness of an insured person, whether the debt or liability of the insured person or beneficiary was incurred before or after the accrual of benefits under the insurance policy or contract, except that this exemption does not apply to actions to recover for necessities contracted for after the accrual of the benefits. (k) The interest, not exceeding $1,075.00 in par value, in shares held by a member, who is a householder, of an association incorporated under the savings and loan act of 1980, 1980 PA 307, MCL 491.102 to 491.1202, except that this exemption does not apply to a person who has a homestead exempted under the general laws of this state. (l) All individual retirement accounts, including Roth IRAs, or individual retirement annuities as defined in section 408 or 408a of the internal revenue code, 26 USC 408 and 408a, and the payments or distributions from those accounts or annuities. This exemption applies to the operation of the federal bankruptcy code as permitted by section 522(b)(2) of the bankruptcy code, 11 USC 522. This exemption does not apply to the amount contributed to an individual retirement account or individual retirement annuity within 120 days before the debtor files for bankruptcy. This exemption does not apply to any of the following: (i) The portion of an individual retirement account or individual retirement annuity that is subject to an order of a court pursuant to a judgment of divorce or separate maintenance. (ii) The portion of an individual retirement account or individual retirement annuity that is subject to an order of a court concerning child support. (iii) The portion of an individual retirement account or individual retirement annuity that is attributable to contributions to the individual retirement account or premiums on the individual retirement annuity, including the earnings or benefits from those contributions or premiums, that, in the tax year made or paid, exceeded the deductible amount allowed under section 408 of the internal revenue code, 26 USC 408. This limitation on contributions does not apply to a rollover of a pension, profit-sharing, stock bonus plan, or other plan that is qualified under section 401 of the internal revenue code, 26 USC 401, or an annuity contract under section 403(b) of the internal revenue code, 26 USC 403. (m) The right or interest of a person in a pension, profit-sharing, stock bonus, or other plan that is qualified under section 401 of the internal revenue code, 26 USC 401, or an annuity contract under section 403(b) of the internal revenue code, 26 USC 403, if the plan or annuity is subject to the employee retirement income security act of 1974, Public Law 93-406, 88 Stat. 829. This exemption does not apply to any amount contributed to a pension, profit-sharing, stock bonus, or other qualified plan or a 403(b) annuity if the contribution occurs within 120 days before the debtor files for bankruptcy. This exemption does not apply to the right or interest of a person in a pension, profit-sharing, stock bonus, or other qualified plan or a 403(b) annuity to the extent that the right or interest is subject to either of the following: (i) An order of a court pursuant to a judgment of divorce or separate maintenance. (ii) An order of a court concerning child support. (n) The interest of the debtor, the codebtor, if any, and the debtor’s dependents, not to exceed $31,900.00 in value or, if the debtor or a dependent of the debtor at the time of the filing of the bankruptcy petition is 65 years of age or older or disabled, not to exceed $47,825.00 in value, in a homestead. In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth when your¬ bankruptcy case is filed. Particularly when valuing furniture and cars, the amounts may be a lot less than what you paid or what it would cost to buy a replacement. You also only need to look at your equity in property. That means you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you have only $10,000 in equity. You can fully protect the $50,000 home with a $10,000 exemption. Some exemptions under state or federal law allow one to keep property in a chapter 7 bankruptcy, but your exemptions do not make any difference to the right of a bank that holds a mortgage or car loan. The bank may take the property to cover the debt if you are behind. In a chapter 13 bankruptcy, a person can keep their property if their plan meets the requirements of the bank¬ruptcy law. In most cases a person must pay the mortgage or lien as if they didn't file bankruptcy. 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