How can you keep your personal property exempt from seizure in Michigan?

If you owe a debt or court judgment to a creditor, you need to take action to keep your personal property exempt from seizure in Michigan. Under Michigan law, if you owe a valid debt and your creditors have a judgment, they can take your personal property. You need to talk to a debt settlement or bankruptcy attorney right away. They can help you protect your personal property from creditors and their debt collection efforts.

A creditor with a valid judgement can file a Form MC 19 (3/13) Request and Order to Seize Property – State of Michigan

A creditor can file a Form MC 19 (3/13) Request and Order to Seize Property – Michigan in their debt collection efforts. This is once the debt collector has a judgment from the Michigan Courts under state law. This can be filed in either the district court or circuit court where the judgment debt was received. This property seizure order allows a plaintiff to have a court officer sent to take your personal property to satisfy your debts. This can be for both secured debt and unsecured debt.

A secured debt is like a car loan or mortgage. It is a debt that allows the creditor to repossess the secured property due to a lien being placed on it by the secured creditor.

Other types of property seizure- bank levy and wage garnishment

Other forms of garnishment include a bank levy or lien, which allows a collection agency, debt collector, or another judgment creditor to seize whatever funds you have in your bank account on the date the bank levy is received. Note the creditor cannot take a retirement account or an individual retirement account. These are exempt from garnishment. A Michigan court also receives this type of garnishment.

A creditor with a wage garnishment can take up to 25% or your gross income. Like the other debt collection methods discussed a wage garnishment involves a credit obtaining a garnishment order from a Michigan court that orders your employer to take a portion of your wages every pay cycle to satisfy their judgment.

State of Michigan personal property exemptions

Fortunately, there are state and federal laws that can keep your property exempt from seizure in Michigan. The State of Michigan has provisions in its code that provide certain exemptions that specify property a creditor cannot take. The US Bankruptcy Code also protects the form of an automatic stay and bankruptcy exemptions that can be used to protect your personal property from debt collection. You need to talk to a debt settlement or bankruptcy attorney to discuss your options.

As discussed, a creditor in Michigan can get an order to seize your property to satisfy a judgment they have against you. However, they cannot take your exempt personal property. An exemption is an amount of property the state allows you to keep for your family’s maintenance. In Michigan, MCL Section 600.6023 provides in pertinent part:

“(1) The following property of a judgment debtor and the judgment debtor’s dependents is exempt from levy and sale under an execution:

(a) All family pictures, all arms and accouterments required by law to be kept by any person, all wearing apparel of every person and their family, and provisions and fuel for comfortable subsistence of each householder and his or her family for 6 months.

(b) All household goods, furniture, utensils, books, and appliances, not exceeding in value $1,000.00.

(c) A seat, pew, or slip occupied by the judgment debtor or the judgment debtor’s family in a house or place of public worship, and all cemeteries, tombs, and rights of burial while in use as repositories of the dead of the judgment debtor’s family or kept for the burial of the judgment debtor.

(d) To each householder, 10 sheep, 2 cows, 5 swine, 100 hens, 5 roosters, and a sufficient quantity of hay and grain, growing or otherwise, for properly keeping the animals and poultry for 6 months.

(e) The tools, implements, materials, stock, apparatus, team, vehicle, motor vehicle, horses, harness, or other things to enable a person to carry on the profession, trade, occupation, or business in which the person is principally engaged, not exceeding in value $1,000.00.”

MCL Section 600.6063

This section of the Michigan Code outlines what personal property a creditor cannot take from you to satisfy a debt. Even if a creditor has a judgment against you, this property cannot be taken from you. If one tries, you will want to talk to an attorney right away to protect your rights. There are exempt funds if they are related to social security or other protected categories. A lien cannot be placed on these funds.

Personal Property Protection Under the US Bankruptcy Code

US Bankruptcy laws can also be used to keep your personal property exempt from seizure and out of the bankruptcy estate. When you file a bankruptcy petition for either a Chapter 7 Bankruptcy Michigan or a Chapter 13 Bankruptcy Michigan, you are covered by the automatic stay. The automatic stay prevents a creditor from taking any action to collect on a debt once a debtor files a bankruptcy case. The filing of a bankruptcy and the resulting automatic stay would provide immediate protection against losing your property.

Also, the US Bankruptcy Code provides exemptions for your personal property. When it comes to personal property, the federal code provides the following personal property exemptions:

  • $4,000 worth of equity in your motor vehicle;
  • $13,400 for household goods and furnishings (up to $600 per item);
  • $2,525 for tools of the trade;
  • $1,600 for personal jewelry
  • A $1,325 “wild card” exemption for property you can’t otherwise exempt, plus up to $12,575 of any unused home equity exemption on your residence

These exemptions are what you can keep from your creditors in a bankruptcy case.

Consult with a debt settlement or bankruptcy attorney today!

Bruce Law Firm has attorneys that can help you protect your personal property. Your creditors will have attorneys it is imperative that you also consult with legal counsel.

Our firm offers a free consultation with a bankruptcy lawyer to discuss your options. Timing is critical. Protect your property and your income. Call today.