Updated: 2021-03-09 by
Federal Non-Bankruptcy Insurance Exemptions (available in all states)
US Bankruptcy Code § 522 Insurance Exemptions
The Federal Bankruptcy Code Exemptions under section 522 are available to you if
- you haven't lived in any state longer than 180 days for a while, or
- if your state allows the Federal exemptions as a choice.
Does Michigan allow debtor the option of using the Federal Bankruptcy exemptions instead of state law exemptions?
Yes. Michigan residents can use the Federal or State exemption systems.
Michigan has passed a special set of exemptions designed only to be used in bankruptcy cases (found in Section 600.5451). Although debtors can use the the exemptions in Michigan's "bankruptcy only" exemption statute, as well as ANY OTHER exemptions found in other Michigan statutes, such as exemptions for life insurance. (See In re Sasasak, 426 B.R. 680.)
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Retirement accounts that are recognized by the IRS are exempt by law in bankruptcy up to over a million dollars. State law may provide additional protection for specific kinds of pensions, under state law.
Insurance exemptions use a lingo all their own and some familiarity with the jargon is essential to understanding what is exempt.