Michigan Bankruptcy Guide

Complete guide to filing bankruptcy in Michigan, including current median income requirements, Michigan's homestead exemption up to $60,700 for elderly or disabled filers, bankruptcy court information, and how to find qualified bankruptcy attorneys throughout Michigan.

Michigan Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in Michigan, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$57,091	$4,758
2 people	$72,763	$6,064
3 people	$84,224	$7,019
4 people	$99,845	$8,321
5 people	$108,845	$9,071
6 people	$117,845	$9,821

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program.

Calculate Your Michigan Eligibility

Michigan Bankruptcy Exemptions

Michigan has its own set of state exemptions and does not allow filers to choose federal exemptions. All Michigan bankruptcy filers must use Michigan state exemptions.

Michigan Homestead Exemption

Up to $40,475 (or $60,700 if elderly or disabled).

Michigan's homestead exemption protects up to $40,475 of equity in your primary residence. If you are age 65 or older, or if you are disabled, the exemption increases to $60,700. This exemption applies to real property including houses, condominiums, and mobile homes on land you own.

The property must be your primary residence, and you must occupy it at the time of filing bankruptcy. The exemption applies to the land the home sits on, up to one lot in an urban area or 40 acres in a rural area.

Michigan Vehicle Exemption

Up to $3,775.

Michigan allows you to protect up to $3,775 of equity in one motor vehicle. If you owe more than your vehicle is worth or have minimal equity, you can typically keep it by continuing to make loan payments through a reaffirmation agreement in Chapter 7 or through your payment plan in Chapter 13.

Michigan State Exemptions

Michigan bankruptcy exemptions include:

• Homestead: $40,475 ($60,700 if age 65+ or disabled)
• Vehicle: $3,775
• Household Goods and Furnishings: $625 per item, up to $4,000 total
• Clothing and Jewelry: $1,875 total for family clothing
• Appliances and Computers: $625 per item
• Books and Family Pictures: $625 per item
• Tools of Trade: $2,775
• Wildcard: None (no general wildcard exemption in Michigan)
• Wages: 60% of earned wages for head of household; 40% for others (or minimum of 30 times federal minimum wage per week)
• Building and Loan Association Shares: Up to $1,250

Other Protected Assets

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits under federal law
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits, public assistance
• Life Insurance: Life insurance proceeds if beneficiary is spouse, child, or dependent; cash value up to $12,785
• Education Savings: Michigan Education Savings Program (MESP) accounts
• Personal Injury Awards: Reasonably necessary for support
• Wrongful Death Awards: Reasonably necessary for support

Filing Bankruptcy in Michigan

Chapter 7 Bankruptcy in Michigan

Chapter 7 bankruptcy is commonly filed throughout Michigan. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in Michigan, you must pass the means test by having income below the Michigan median or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Michigan's exemptions provide good protection for most common assets, especially for elderly or disabled homeowners who qualify for the higher homestead exemption.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in Michigan

Chapter 13 bankruptcy allows Michigan residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is especially useful in Michigan if your income is too high to qualify for Chapter 7, if you have non-exempt assets you want to protect (particularly if you have more than $40,475 in home equity and are under 65), or if you have priority debts like recent taxes. Your monthly payment is based on your disposable income after allowable living expenses.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Courts in Michigan

Michigan is divided into two federal bankruptcy court districts:

Eastern District of Michigan

Main Courthouses: Detroit, Flint, Bay City

Covers eastern Michigan including Detroit and its suburbs, Flint, Bay City, Ann Arbor, and the southeastern portion of the state. This is the larger and busier of Michigan's two bankruptcy districts.

Court divisions: Detroit (Southern Division), Flint (Northern Division), and Bay City (Northern Division).

Western District of Michigan

Main Courthouses: Grand Rapids, Kalamazoo, Marquette

Covers western Michigan including Grand Rapids, Kalamazoo, Lansing, Marquette, Traverse City, and the western portion of the state including the Upper Peninsula.

Court divisions: Grand Rapids (Southern Division), Kalamazoo (Southern Division), and Marquette (Northern Division).

You must file in the district where you have lived for the greater part of the 180 days before filing. Visit the U.S. Courts website for specific court locations, filing procedures, and local rules.

Michigan Residency Requirements

To use Michigan bankruptcy exemptions, you must have been domiciled (legally residing) in Michigan for at least 730 days (2 years) before filing. If you've lived in Michigan for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

Michigan does not allow the choice of federal exemptions, so once you meet the residency requirement, you must use Michigan state exemptions.

Find a Michigan Bankruptcy Attorney

Most Michigan bankruptcy attorneys offer free initial consultations. Given the complexity of bankruptcy law and Michigan's specific exemption rules, consulting with an experienced Michigan bankruptcy attorney is highly recommended.

What a Michigan Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Maximize Michigan exemptions to protect your assets
• Help you qualify for the higher homestead exemption if you're elderly or disabled
• Navigate Michigan-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in Michigan

Chapter 7 bankruptcy attorney fees in Michigan vary by location:

• Detroit metro area: $1,200 to $1,800 plus $338 filing fee
• Grand Rapids, Ann Arbor: $1,000 to $1,600 plus $338 filing fee
• Other Michigan cities and rural areas: $900 to $1,400 plus $338 filing fee

Chapter 13 attorney fees typically range from $3,000 to $4,500 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront.

Many Michigan attorneys offer payment plans for Chapter 7 to make bankruptcy more accessible.

Michigan-Specific Bankruptcy FAQs

Can I keep my house in Michigan bankruptcy?

It depends on your equity and age/disability status. If you're under 65 and not disabled, you can protect up to $40,475 of equity. If you're 65 or older or disabled, you can protect up to $60,700. If your equity exceeds these amounts, you may need to file Chapter 13 to keep your home or use other strategies with your attorney.

Can I keep my car in Michigan bankruptcy?

Yes, in most cases. Michigan allows you to exempt up to $3,775 of equity in one motor vehicle. If you owe more than your car is worth or have minimal equity, you can typically keep it by continuing to make payments through a reaffirmation agreement.

Why doesn't Michigan allow federal exemptions?

Michigan is one of the states that opted out of the federal exemption system when the Bankruptcy Code was created. Michigan lawmakers decided that state-created exemptions better reflect Michigan values and property ownership patterns. All Michigan filers must use state exemptions.

What if I'm elderly - do I automatically get the higher homestead exemption?

If you are age 65 or older at the time of filing, you automatically qualify for the $60,700 homestead exemption instead of the standard $40,475. You must provide proof of age (birth certificate, driver's license) when claiming this exemption.

How does bankruptcy affect my Michigan auto insurance?

Bankruptcy does not directly affect your Michigan auto insurance coverage. However, Michigan law requires no-fault auto insurance, and bankruptcy won't change this requirement. Some insurers may check credit when setting rates, but having filed bankruptcy shouldn't cancel existing coverage.

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