HB-5838, As Passed House, December 14, 2012HB-5838, As Passed Senate, December 12, 2012
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 5838
(As amended December 13, 2012)
[A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending section 5451 (MCL 600.5451), section 5451 as added
by 2004 PA 575.]
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 5451. (1) A debtor in bankruptcy under the bankruptcy
code,
11 USC 101 to 1330, 1532, may exempt from property of the
estate property that is exempt under federal law or, under 11 USC
522(b)(2), the following property:
(a) All of the following:
(i) Family pictures.
(ii) Arms and accoutrements required by law to be kept by a
person.
(iii) Wearing apparel, excluding furs.
(iv) Cemeteries, tombs, and rights of burial in use as
repositories
for the dead of the judgment debtor's family or kept
for
burial of the judgment debtor.
(v) Professionally prescribed health aids.
(b) Provisions and fuel for comfortable subsistence of each
householder and his or her family for 6 months.
(c) The interest, not to exceed a value of $450.00 in each
item and an aggregate value of $3,000.00, in household goods,
furniture, utensils, books, appliances, and jewelry.
(d) The interest, not to exceed $500.00 in value, in a seat,
pew,
or slip occupied by the judgment debtor or the judgment
debtor's family in a house or place of public worship.
(e) The interest, not to exceed $2,000.00 in value, in crops,
farm animals, and feed for the farm animals.
(f) The interest, not to exceed $500.00 in value, in household
pets.
(g) The interest, not to exceed $2,775.00 in value, in 1 motor
vehicle.
(h) The interest, not to exceed $500.00 in value, in 1
computer and its accessories.
(i) The interest, not to exceed $2,000.00 in value, in the
tools, implements, materials, stock, apparatus, or other things to
enable a person to carry on the profession, trade, occupation, or
business in which the person is principally engaged.
(j)
Money or other benefits paid, provided, or allowed to be
paid , or provided,
or allowed, by a stock or mutual life, health,
or casualty insurance company because of the disability due to
injury or sickness of an insured person, whether the debt or
liability of the insured person or beneficiary was incurred before
or after the accrual of benefits under the insurance policy or
contract, except that this exemption does not apply to actions to
recover for necessities contracted for after the accrual of the
benefits.
(k)
The interest, not exceeding $1,000.00 in par value, in
shares
held by a member, who is a householder, of an association
incorporated
under the savings and loan act of 1980, 1980 PA 307,
MCL
491.102 to 491.1202, except that this exemption does not apply
to
a person who has a homestead exempted under the general laws of
this
state.
(k) (l) All
individual retirement accounts, including Roth
IRAs, or individual retirement annuities as defined in section 408
or 408a of the internal revenue code, 26 USC 408 and 408a, and the
payments or distributions from those accounts or annuities. This
exemption applies to the operation of the federal bankruptcy code
as permitted by section 522(b)(2) of the bankruptcy code, 11 USC
522. This exemption does not apply to the amount contributed to an
individual retirement account or individual retirement annuity
within 120 days before the debtor files for bankruptcy. This
exemption does not apply to any of the following:
(i) The portion of an individual retirement account or
individual retirement annuity that is subject to an order of a
court pursuant to a judgment of divorce or separate maintenance.
(ii) The portion of an individual retirement account or
individual retirement annuity that is subject to an order of a
court concerning child support.
(iii) The portion of an individual retirement account or
individual retirement annuity that is attributable to contributions
to the individual retirement account or premiums on the individual
retirement annuity, including the earnings or benefits from those
contributions or premiums, that, in the tax year made or paid,
exceeded the deductible amount allowed under section 408 of the
internal revenue code, 26 USC 408. This limitation on contributions
does not apply to a rollover of a pension, profit-sharing, stock
bonus plan, or other plan that is qualified under section 401 of
the internal revenue code, 26 USC 401, or an annuity contract under
section 403(b) of the internal revenue code, 26 USC 403.
(l) (m)
The right or interest of a person
in a pension, profit-
sharing, stock bonus, or other plan that is qualified under section
401 of the internal revenue code, 26 USC 401, or an annuity
contract under section 403(b) of the internal revenue code, 26 USC
403, if the plan or annuity is subject to the employee retirement
income security act of 1974, Public Law 93-406, 88 Stat. 829. This
exemption does not apply to any amount contributed to a pension,
profit-sharing, stock bonus, or other qualified plan or a 403(b)
annuity if the contribution occurs within 120 days before the
debtor files for bankruptcy. This exemption does not apply to the
right or interest of a person in a pension, profit-sharing, stock
bonus, or other qualified plan or a 403(b) annuity to the extent
that the right or interest is subject to either of the following:
(i) An order of a court pursuant to a judgment of divorce or
separate maintenance.
(ii) An order of a court concerning child support.
(m) (n)
The interest of the debtor, the
codebtor, if any, and
the debtor's dependents, not to exceed $30,000.00 in value or, if
the debtor or a dependent of the debtor at the time of the filing
of the bankruptcy petition is 65 years of age or older or disabled,
not to exceed $45,000.00 in value, in a homestead.
(n) (o)
Property described in section 1 of
1927 PA 212, MCL
557.151, or real property, held jointly by a husband and wife as a
tenancy by the entirety, except that this exemption does not apply
with regard to a claim based on a joint debt of the husband and
wife.
(o) (p)
If the owner of a homestead dies,
leaving a surviving
spouse but no children, the surviving spouse before his or her
remarriage, unless the surviving spouse is the owner of a homestead
in his or her own right, may exempt the homestead and the rents and
profits of the homestead.
(2) An exemption under this section does not apply to a
mortgage, lien, or security interest in the exempt property that is
consensually given or lawfully obtained unless the lien is obtained
by judgment, attachment, levy, or similar legal process in
connection with a court action or proceeding against the debtor.
(3) If property that is exempt under this section is sold,
damaged, destroyed, or acquired for public use, the right to
receive proceeds or, if the owner receives proceeds and holds them
in a manner that makes them identifiable as proceeds, the proceeds
received are exempt from the property of a federal bankruptcy
estate in the same manner and amount as the exempt property. An
exemption under this subsection may be claimed up to 1 year after
the receipt of the proceeds by the owner.
(4) On March 1, 2005 and at the end of each 3-year period
after 2005, the state treasurer shall adjust each dollar amount in
this section or, for each adjustment after March 1, 2005, each
adjusted amount, by an amount determined by the state treasurer to
reflect the cumulative change in the consumer price index for the
3-year period ending on the December 31 preceding the adjustment
date and rounded to the nearest $25.00. The state treasurer shall
publish the adjusted amounts. The adjusted amounts apply to cases
filed on or after April 1 following the adjustment date.
(5) As used in this section:
(a) "Consumer price index" means the consumer price index for
all urban consumers in the area of Detroit-Ann Arbor-Flint,
Michigan, published by the United States department of labor or, if
the United States department of labor ceases publishing that index,
the most similar index available.
(b) "Disabled" means unable to engage in substantial gainful
activity, as defined by 42 USC 1382c(a)(3)(E), as a result of a
physical or mental impairment and receiving supplemental security
income
under 42 USC 1382(a)(3)(A) 1382c(a)(3)(A)
and (C).
(c) "Proceeds" means money payable or paid as a result of 1 or
more of the following:
(i) Sale of the property.
(ii) Insurance or other indemnification for damage or
House Bill No. 5838 (S-1) as amended December 14, 2012
destruction of the property.
(iii) Compensation for the acquisition for public use of the
property.
(d) "Homestead" means 1 of the following owned or being
purchased under an executory contract by the debtor that the debtor
or a dependent of the debtor occupies as his or her principal
residence:
(i) If the land is located outside of a recorded plat, city, or
village, a residential dwelling and appurtenances and the land on
which they are situated, not exceeding 40 acres.
(ii) If the land is located within a recorded plat, city, or
village, a residential dwelling and appurtenances and the land on
which they are situated, not exceeding 1 lot or parcel.
(iii) A residential dwelling situated on land not owned by the
debtor.
(iv) A condominium unit.
(v) A unit in a cooperative.
(vi) A motor home.
(vii) A boat or other watercraft.
(e) "Residential dwelling" includes, but is not limited to, a
house or a manufactured or mobile home.
[
House Bill No. 5838 (S-1) as amended December 14, 2012
House Bill No. 5838 (S-1) as amended December 14, 2012
House Bill No. 5838 (S-1) as amended December 14, 2012
House Bill No. 5838 (S-1) as amended December 14, 2012
House Bill No. 5838 (S-1) as amended December 14, 2012
]
Enacting section 1. This amendatory act takes effect December
31, 2012.
Enacting section 2. This amendatory act does not take effect
unless House Bill No. 5835 of the 96th Legislature is enacted into
law.