Michigan
Bankruptcy in Michigan (2026): Exemptions & Means Test
Independently fact-checked against primary sources (last audited August 16, 2026). · Reviewed by the RecordingLaw editorial team. · Law checked current as of August 9, 2026. · 5 primary sources cited on this page. How we verify our legal content
Michigan is one of the states that gives bankruptcy filers a choice: you can use Michigan's own exemptions or the federal bankruptcy exemptions, whichever protects more of your property. Bankruptcy itself is federal law, but the exemptions that decide what you keep, and the means-test income that decides which chapter you can use, are state-specific. Michigan's state exemptions are written in MCL 600.5451 and are adjusted for inflation every three years, so the figures below reflect the amounts in effect for cases filed in 2026, and you should confirm the current numbers before relying on them.
This page is general legal information, not legal advice. It is part of our Bankruptcy by State series.
Does Michigan use state or federal bankruptcy exemptions?
Michigan is not an opt-out state. Under MCL 600.5451, a debtor who files bankruptcy in Michigan may elect to use the Michigan exemptions listed in that statute, but the same section preserves the alternative of claiming the exemptions allowed under federal law. In practice that means a Michigan filer picks one of two complete menus: the state exemptions in MCL 600.5451 or the federal bankruptcy exemptions in 11 U.S.C. 522(d). You cannot mix items from both lists. About a third of states, including Michigan, allow this choice; roughly two-thirds have opted out and force filers onto state law only.
The choice usually turns on home equity. Michigan's state homestead is larger than the federal one, so homeowners with meaningful equity often choose the state set, while renters and filers with little home equity sometimes prefer the federal set because of its larger wildcard. Married couples filing jointly can generally each claim a full set of whichever system they choose, which often doubles the protected amounts.
Michigan homestead exemption
Michigan's state homestead exemption is the headline protection for homeowners, and it is indexed for inflation. The base amounts in MCL 600.5451 were set by the Legislature, and the State Treasurer recalculates them every three years using the change in the consumer price index, rounded to the nearest $25. The adjusted amounts apply to bankruptcy cases filed on or after April 1 following each adjustment.
For cases filed on or after April 1, 2026, the Michigan homestead exemption protects up to $51,150 of equity in a primary residence. The figure rises to $76,725 if the debtor or a dependent of the debtor is 65 years of age or older or is disabled at the time the petition is filed. These amounts replaced the prior figures of $46,125 and $69,200 that applied to cases filed from April 1, 2023 through March 31, 2026, an increase of roughly 10.9 percent. Because the numbers update on a three-year cycle, the next adjustment is expected for cases filed on or after April 1, 2029.
A filer who would rather use the federal system protects up to $31,575 of home equity under 11 U.S.C. 522(d)(1). Homestead protection covers equity, not the full value of the home, so a residence worth far more than the mortgage plus the exemption can leave non-exempt equity that a Chapter 7 trustee may reach. That is one reason homeowners with substantial equity often look at Chapter 13 instead.
Vehicle, wildcard, and personal-property exemptions
Michigan's state exemptions in MCL 600.5451 are also inflation-adjusted and were raised about 10.9 percent for cases filed on or after April 1, 2026. The main categories include:
- Motor vehicle: up to roughly $4,725 of equity in one vehicle after the 2026 adjustment.
- Household goods, furniture, utensils, books, appliances, and jewelry: up to $775 per item, with an aggregate cap of $5,125.
- Tools of the trade and professional property: up to $3,400.
- A computer and accessories, household pets, and certain farm property, each with their own limits.
- Retirement accounts: tax-qualified plans are protected under separate exemptions and under federal law regardless of which menu you choose.
Michigan's state exemption list does not include a large general wildcard. Filers who need to protect cash or extra equity sometimes choose the federal exemptions instead, because 11 U.S.C. 522(d)(5) provides a wildcard of $1,675 plus up to $15,800 of unused homestead exemption. Because the state figures round and update every three years, confirm the current amounts in the Michigan Treasury inflation-adjustment notice before filing.
The Chapter 7 means test in Michigan
The means test screens Chapter 7 filings for a presumption of abuse. The first step compares your household's current monthly income, annualized, to the median family income for a Michigan household of the same size. If your income is at or below the Michigan median, there is no presumption of abuse and you do not need to complete Form 122A-2, but that alone does not make you eligible for Chapter 7. If it is above the median, you complete the longer calculation that subtracts allowed expenses to see whether you have disposable income that should fund a Chapter 13 plan instead.
The U.S. Trustee Program publishes the median figures and updates them periodically. For cases filed on or after April 1, 2026, the Michigan median family income is:
| Household size | Michigan median annual income |
|---|---|
| 1 | $67,352 |
| 2 | $83,432 |
| 3 | $103,449 |
| 4 | $123,010 |
Add $11,100 for each additional person beyond four. These figures apply only to cases filed on or after April 1, 2026. The U.S. Trustee Program revises the median income data roughly twice a year, so confirm the current numbers for your filing date.
Chapter 7 vs. Chapter 13 in Michigan
Chapter 7 is a liquidation. A trustee can sell non-exempt property to pay creditors, but because Michigan's exemptions protect most household property, many Chapter 7 cases are "no-asset" cases where nothing is sold. Most remaining unsecured debt, such as credit cards and medical bills, is discharged in a few months.
Chapter 13 is a reorganization for filers with regular income. You keep your property and repay some or all of what you owe through a three-to-five-year plan. Chapter 13 is often chosen by homeowners who are behind on a mortgage, because the plan can spread out the missed payments and stop a foreclosure while you catch up.
In both chapters, filing triggers the automatic stay under 11 U.S.C. 362. The stay immediately halts most collection activity, including foreclosure sales, wage garnishment, repossession, and collection calls, while the case proceeds.
Where you file bankruptcy in Michigan
Michigan is divided into two federal bankruptcy districts. The U.S. Bankruptcy Court for the Eastern District of Michigan sits in Detroit, Flint, and Bay City and covers the eastern and northeastern counties. The U.S. Bankruptcy Court for the Western District of Michigan sits in Grand Rapids and Marquette and covers the western Lower Peninsula and the Upper Peninsula. Which court you file in depends on the county where you live. Before filing, federal law requires you to complete an approved credit-counseling course, and you must complete a debtor-education course before your debts are discharged.
What bankruptcy can and cannot do
Bankruptcy discharges most unsecured debts, but several categories generally survive: most student loans (absent a separate showing of undue hardship), recent income taxes, child support and alimony, and debts from fraud or willful injury. Secured debts like a car loan or mortgage continue if you want to keep the collateral and keep paying.
Exemption amounts change, and the choice of exemption menu and chapter depends on your full financial picture, so get a free bankruptcy evaluation in which a Michigan attorney runs both comparisons before you file (attorney advertising).
Frequently Asked Questions
Does Michigan use state or federal bankruptcy exemptions?
Michigan lets you choose. It has not opted out of the federal exemptions, so a filer domiciled in Michigan may use either the state exemptions in MCL 600.5451 or the federal bankruptcy exemptions in 11 U.S.C. 522(d). You pick one full menu, not a mix of both.
What is the homestead exemption in Michigan?
For cases filed on or after April 1, 2026, Michigan's inflation-adjusted state homestead exemption protects up to $51,150 of equity, rising to $76,725 if the debtor or a dependent is 65 or older or disabled, under MCL 600.5451. The federal alternative is $31,575. The state figure adjusts every three years, so confirm the current amount before filing.
What is the Michigan median income for the means test?
For cases filed on or after April 1, 2026, the Michigan median family income is $67,352 for 1 person, $83,432 for 2, $103,449 for 3, and $123,010 for 4, adding $11,100 for each additional person. The U.S. Trustee Program updates these figures periodically.
Will I lose my house or car if I file bankruptcy in Michigan?
Often no. Michigan's homestead exemption of up to $51,150 (or $76,725 in certain cases) and a vehicle exemption of roughly $4,725 protect equity up to those limits, and filers who can use the larger federal set may protect different amounts. Most filers keep their home and car as long as they stay current on the related loans, though equity above the exemption can be at risk in Chapter 7.
Can I use the federal bankruptcy exemptions in Michigan?
Yes. Because Michigan has not opted out, you may choose the full federal exemption set in 11 U.S.C. 522(d) instead of the Michigan exemptions. Filers with little home equity sometimes prefer the federal set for its larger wildcard, while homeowners with substantial equity often choose Michigan's higher homestead.
Where do I file for bankruptcy in Michigan?
Michigan has two federal bankruptcy districts. The Eastern District sits in Detroit, Flint, and Bay City, and the Western District sits in Grand Rapids and Marquette. The court you use depends on your county. You must complete approved credit counseling before filing.
What debts cannot be discharged in a Michigan bankruptcy?
Most student loans (absent a showing of undue hardship), recent income taxes, child support, alimony, and debts arising from fraud generally are not discharged. Most credit-card and medical debt usually is.
Does filing bankruptcy stop a foreclosure in Michigan?
Filing triggers the automatic stay under 11 U.S.C. 362, which immediately halts most collection activity, including foreclosure and wage garnishment. Chapter 13 can also let a homeowner cure missed mortgage payments over time.
Updates
Clarified that income at or below the state median means the presumption of abuse does not arise under the Chapter 7 means test, not that a filer qualifies for Chapter 7.
Corrected the Michigan household goods aggregate cap to $5,125 and the tools of the trade exemption to $3,400, and added the $775 per-item household goods limit, using the State Treasurer signed inflation-adjustment notice for cases filed on or after April 1, 2026.
Independently fact-checked against the cited primary sources
Governing law re-checked for recent changes
Governing law re-checked for recent changes
Reviewed and approved by an editor
The Law Behind This Article
This article rests on the statutory provisions below, held in our own legal record and retrieved from the official source. Tap a section to read the operative text.
Michigan Compiled Laws
§ 600.5451Bankruptcy; exemptions from property of estate; exception; exempt property sold, damaged, destroyed, or acquired for public use; amounts adjusted by state treasurer; definitionsIn forcecited in 3 of our articles
(1) A debtor in bankruptcy under the bankruptcy code, 11 USC 101 to 1532, may exempt from property of the estate property that is exempt under federal law or, under 11 USC 522(b) (2), the following property: (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 debtor's family or kept for burial of the 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 $450.00 in each item and an aggregate value of $3,000.00, in household goods, furniture, utensils, books, appliances, and jewelry. (d) The interest, not to exceed $500.00 in value, in a seat, pew, or slip occupied by the debtor or the debtor's family in a house or place of public worship. (e) The interest, not to exceed $2,000.00 in value, in crops, farm animals, and feed for the farm animals. (f) The interest, not to exceed $500.00 in value, in household pets.
Official text (excerpt) · last checked 2026-09-06 · Read the full text in our law library · Verify at legislature.mi.gov
Cited in 29 court opinions in our collectionLatest citing opinion in our collection: 2025
Opinions citing this section in our collection:
- Peggy S Roach v. Daniel J Fitzstephens (Michigan Court of Appeals 2016)“…erally exempt in bankruptcy. 11 USC 522(d)(10)(E); see also MCL 600.5451(1)(l) (applicable if debtor chooses sta…”
- Richardson v. Schafer (In Re Schafer) (Court of Appeals for the Sixth Circuit 2012, 689 F.3d 601)“…hold that Michigan’s bankruptcy-specific exemption statute, Mich. Comp. Laws § 600.5451, is constitutionally sound.…”
- In Re Wallace (United States Bankruptcy Court, W.D. Michigan 2006, 347 B.R. 626)“…property as exempt. The basis for her claimed exemption is Mich. Comp. Laws § 600.5451 (l)(n). See also, 11 U.S.…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Michigan Homestead Exemption: PRE, Form 2368 and Deadlines
United States Code Title 11
§ 522ExemptionsIn forcecited in 54 of our articles
In this section— “dependent” includes spouse, whether or not actually dependent; and “value” means fair market value as of the date of the filing of the petition or, with respect to property that becomes property of the estate after such date, as of the date such property becomes property of the estate. Notwithstanding section 541 of this title, an individual debtor may exempt from property of the estate the property listed in either paragraph (2) or, in the alternative, paragraph (3) of this subsection. In joint cases filed under section 302 of this title and individual cases filed under section 301 or 303 of this title by or against debtors who are husband and wife, and whose estates are ordered to be jointly administered under Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, one debtor may not elect to exempt property listed in paragraph (2) and the other debtor elect to exempt property listed in paragraph (3) of this subsection. If the parties cannot agree on the alternative to be elected, they shall be deemed to elect paragraph (2), where such election is permitted under the law of the jurisdiction where the case is filed.
Official text (excerpt) · last checked 2026-09-16 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 7,574 court opinions in our collectionLatest citing opinion in our collection: 2026
In the courts (editorial summary, independently checked):Taylor v. Freeland & Kronz (1992) held that a trustee who does not object within the 30-day period cannot later challenge an exemption claimed under 522(l), even one with no statutory basis. Owen v. Owen (1991) held that 522(f) lien avoidance is not defeated by a state exemption written to exclude lien-encumbered property.
Opinions citing this section in our collection:
- Taylor v. Freeland & Kronz (Supreme Court of the United States 1992, 503 U.S. 638)✓A Chapter 7 debtor listed the entire proceeds of her TWA discrimination suit as exempt and the trustee let the 30-day objection window lapse; the Court held that under § 522(l) the property is exempt once no one objects, even absent a colorable statutory basis.
- Patterson v. Shumate (Supreme Court of the United States 1992, 504 U.S. 753)✓A debtor's $250,000 ERISA pension interest was excluded from his estate under § 541(c)(2); answering a surplusage argument, the Court read § 522(d)(10)(E) as exempting a broader set of plans, and expressly declined to decide whether § 522(b)(2)(A) also applied.
- Owen v. Owen (Supreme Court of the United States 1991, 500 U.S. 305)✓An ex-wife's judgment lien attached to a Florida condo before state law made it a homestead; the Court held § 522(f) measures impairment against the exemption the debtor would have had but for the lien, so Florida's carve-out for prior liens did not defeat avoidance.
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Bankruptcy Laws by State (2026): Exemptions & Means Test, Bankruptcy in Alabama (2026): Exemptions & Means Test, Bankruptcy in Alaska (2026): Exemptions & Means Test
§ 362Automatic stayIn forcecited in 54 of our articles
Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of— the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title; the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title; any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate; any act to create, perfect, or enforce any lien against property of the estate; any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title; any act to…
Official text (excerpt) · last checked 2026-09-16 · Read the full text in our law library · Verify at uscode.house.gov
Cited in 19,606 court opinions in our collectionLatest citing opinion in our collection: 2026
In the courts (editorial summary, independently checked):United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd. (1988) held that an undersecured creditor gets no interest as adequate protection under 362(d)(1) for delay caused by the stay. NLRB v. Bildisco & Bildisco (1984) applied 362(a) in requiring claims be pursued through bankruptcy administration, not suit.
Opinions citing this section in our collection:
- Clinton v. Jones (Supreme Court of the United States 1997, 520 U.S. 681)“…ublic interests. Brief for Petitioner 34-36. See, e. g., 11 U. S. C. § 362 (litigation against debtor stayed upon…”
- United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd. (Supreme Court of the United States 1988, 484 U.S. 365)✓An undersecured lender on a Houston apartment project sought monthly payments as the price of continuing the § 362(a) automatic stay; the Court held that 'adequate protection' under § 362(d)(1) does not entitle it to interest for the delay in foreclosing on its collateral.
- Pennzoil Co. v. Texaco Inc. (Supreme Court of the United States 1987, 481 U.S. 1)“…if it were forced to file for bankruptcy under Chapter 11. 11 U. S. C. §362 . Texaco, or its successor in interest,…”
Identified automatically from the court opinions citing this section — not a ranking of which case controls.
Also relied on in: Bankruptcy in Arizona (2026): Exemptions & Means Test, Bankruptcy in Arkansas (2026): Exemptions & Means Test, Bankruptcy in California (2026): Exemptions & Means Test
Sources and References
- MCL 600.5451, Michigan bankruptcy exemptions (homestead, motor vehicle, household goods, tools) and the inflation-adjustment mechanism and federal-exemption option(legislature.mi.gov).gov
- Michigan Department of Treasury, notice of inflation-adjusted MCL 600.5451 bankruptcy exemption amounts (3-year CPI adjustment cycle)(michigan.gov).gov
- U.S. Trustee Program, Census Bureau Median Family Income by family size, cases filed on or after April 1, 2026(justice.gov).gov
- 11 U.S.C. 522, exemptions, including the state opt-out authority in 522(b) and the federal exemption schedule in 522(d)(law.cornell.edu)
- U.S. Bankruptcy Court for the Eastern District of Michigan (Detroit, Flint, Bay City)(mieb.uscourts.gov).gov
- U.S. Bankruptcy Court for the Western District of Michigan (Grand Rapids, Marquette)(miwb.uscourts.gov).gov
- Michigan Department of Treasury, signed notice of January 30, 2026: inflation-adjusted MCL 600.5451 bankruptcy exemption amounts for cases filed on or after April 1, 2026 (certified 10.89 percent cumulative Detroit CPI change)(michigan.gov)
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