“Exemption” is a bankruptcy term that describes what you keep when filing for bankruptcy.

We don’t think there is a more misunderstood part of bankruptcy as exemptions.  Exemptions is one of the major reasons a person should file bankruptcy with the help of an experience bankruptcy attorney rather than alone.

Persons in Michigan are allowed to exempt (keep) the basic assets that allow you to continue with a “fresh start”  when filing bankruptcy. The bankruptcy code does not require you to sell off everything and live in financial ruin.

You will still need a place to live, transportation and relief from debt. In some cases, filing bankruptcy in Michigan may allow you to avoid foreclosure on your home. Your home would be considered “exempt property.” 

When filing forms for bankruptcy the debtor (which is you) claims certain property as exempt. If no objections are filed to the exemptions, they become final 30 days after the first meeting of creditors. Your claimed exempt property is then not part of the bankruptcy estate.

The purpose of Chapter 7 bankruptcy is to get a fresh start.  That is possible if the debtor (you) has something with which to start.

Household goods are usually exempt because they have little resale value and offer little to take, sell and pay creditors.

Pension and retirement plans are excluded from bankruptcy  and therefore, not subject to the reach of the bankruptcy trustee.

IRA’s and other retirement savings may be property of the estate but are frequently exempt. The 2005 amendments to the Bankruptcy Code increased the exemption for IRA’s for all debtors, regardless of state of residence.  Check with a bankruptcy attorney in your state to find out your State’s limits