Legislative Analysis
Phone: (517) 373-8080
BANKRUPTCY: INCREASE HOMESTEAD EXEMPTION
http://www.house.mi.gov/hfa
House Bill 4166 as introduced Analysis available at
Sponsor: Rep. Ben Frederick http://www.legislature.mi.gov
Committee: Judiciary
Complete to 9-26-22
SUMMARY:
House Bill 4166 would amend the Revised Judicature Act to increase the amount of equity in
a homestead that may be protected in a bankruptcy proceeding and to establish the exemption
for all bankruptcy filers by eliminating the higher exemption currently available only for older
or disabled filers.
When a person files a petition for bankruptcy, certain classes of property, and certain amounts
of those property types, are protected (or exempted) from the claims of creditors by state or
federal bankruptcy laws. Although the bankruptcy process falls under federal law, a debtor in
bankruptcy may choose from the list of exemptions provided either under federal law or under
state law, but not both.
The list of state exemptions is found in section 5451 of the Revised Judicature Act. Dollar
amounts of the interest in a property that can be exempted are adjusted for inflation
periodically.
The bill would amend section 5451 to increase the amount of interest (equity) a debtor,
codebtor (if any), and the debtor’s dependents have in a homestead that may be exempted in a
bankruptcy proceeding to no more than $150,000 in value. (As adjusted for inflation, the
current maximum value in equity that may be exempted is $40,475.)
Section 5451 also allows a higher exemption if a filer or the filer’s dependent, at the time of
the filing of the bankruptcy petition, is 65 years of age or older or is disabled. (The current
maximum exemption, as adjusted for inflation, is $60,725 in value.)
The bill would eliminate this exemption.
MCL 600.5451
FISCAL IMPACT:
House Bill 4166 would have no fiscal impact on the state or on local units of government.
Legislative Analyst: Susan Stutzky
Fiscal Analyst: Robin Risko
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
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Statutes affected:
House Introduced Bill: 600.5451