Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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If you have to file for bankruptcy, then you can exempt up to $3500 of your home’s value (assuming the land is under 40 acres in size). This means that if you have less than $3500 of equity in your home, then it cannot be sold for the purpose of paying creditors. However, if you have more than $3500 of equity in your home, then it can be sold for the purpose of paying your creditors. The exact text of the Michigan law is as follows:
600.6023 Property exempt from levy and sale under execution; lien excluded from exemption; homestead exemption; rents and profits.
(1) The following property of the debtor and the debtor's dependents shall be exempt from levy and sale under any execution:
(h) A homestead of not exceeding 40 acres of land and the dwelling house and appurtenances on that homestead, and not included in any recorded plat, city, or village, or, instead, and at the option of the owner, a quantity of land not exceeding in amount 1 lot, being within a recorded town plat, city, or village, and the dwelling house and appurtenances on that land, owned and occupied by any resident of this state, not exceeding in value $3,500.00. This exemption extends to any person owning and occupying any house on land not his or her own and which the person claims as a homestead. However, this exemption does not apply to any mortgage on the homestead, lawfully obtained, except that the mortgage is not valid without the signature of a married judgment debtor's spouse unless either of the following occurs:
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