WILL I LOOSE ALL OF MY PROPERTY IF I FILE FOR BANKRUPTCY

Many people believe that after filing for bankruptcy all they will have left is the shirt on their back.   The bankruptcy laws were not passed to punish people who file for bankruptcy, but to give them a fresh start.   Michigan law allows Michigan residents to use the Federal Exemptions when filing for bankruptcy.  These exemptions are, with certain limited exceptions, more generous than the Michigan exemptions and will allow you to keep most if not all of your property.   With current Federal Exemptions you can protect the following:

20,200 in equity in your home (40,400 if your are married)

3225 in equity in your car (or a total of 6,450 in two cars if you are married)

525 in value per item in household goods, up to a total of 10,775 (double that for married couples)

2025 in things you need for your job (tools, books, special computers etc)

1,350 in jewelry

1,075 in any property, plus half of any unused exemption in your home.

In determining whether the property is exempt,  it’s value is not what you paid for it, rather, what it is worth when your bankruptcy case is filed.  Generally, this means that the value is much less than what you originally paid.  If you paid $1,000 for a flat screen TV three years ago, chances are it’s worth less than half of that amount today.   Keep in mind however, that property that is subject to a lien, such as a house with a mortgage, or a car with a car loan, is still subject to the lien.  So if your car is worth $3,000 and your loan is $3,200 your exemption does not allow you to get rid of the lien and keep the car.   It is important to know what exemptions are allowed and the amounts of the exemptions so you don’t loose any property if you file Chapter 7 Bankruptcy.

Written by admin

Bankruptcy Attorney serving Grand Rapids Michigan and all of Western Michigan

Website: http://www.grandrapidsbankruptcylaw.com/demo

Leave a Reply

Your email address will not be published. Required fields are marked *