HB-5838, As Passed Senate, December 12, 2012
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 5838
A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending sections 5451 and 6023 (MCL 600.5451 and 600.6023),
section 5451 as added by 2004 PA 575 and section 6023 as amended by
1998 PA 61.
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
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.
Sec.
6023. (1) The following property of the a judgment debtor
and
the judgment debtor's dependents shall be is exempt
from levy
and
sale under any 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
or individual and his or her 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 any 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 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.
(f) Any money or other benefits paid, provided, or allowed to
be paid, provided, or allowed, by any stock or mutual life or
health or casualty insurance company, on account of the disability
due
to injury or sickness of any the
insured person, whether the
debt or liability of such insured person or beneficiary was
incurred before or after the accrual of benefits under the
insurance policy or contract, except that the exemption under this
subdivision does not apply to actions to recover for necessities
contracted for after the accrual of the benefits.
(g)
The shares held by any member, being a householder, of any
association
incorporated under the provisions of the savings and
loan
act of 1980, 1980 PA 307, MCL 491.102 to 491.1202, to the
amount
of $1,000.00 in such shares, at par value, except that this
exemption
does not apply to any person who has a homestead exempted
under
the general laws of this state.
(g) (h)
A homestead of not exceeding more than 40 acres of
land
and the dwelling house and appurtenances on that homestead ,
and
that is not included in any a recorded
plat, city, or village,
or,
instead, and at the option of the owner, a quantity of land not
exceeding
in amount that consists of
not more than 1 lot, being
that is 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 applies
to any house that is owned, occupied, and claimed as a homestead by
a
person but that is located on land that is not
his or her own and
which
the person claims as a homestead. owned
by the person.
However,
this exemption does not apply to any a mortgage on the
homestead , that is lawfully
obtained. , except that the A mortgage
is not valid for purposes of this subdivision without the signature
of a married judgment debtor's spouse unless either of the
following occurs:
(i) The mortgage is given to secure the payment of the purchase
money or a portion of the purchase money.
(ii) The mortgage is recorded in the office of the register of
deeds of the county in which the property is located, for a period
of 25 years, and no notice of a claim of invalidity is filed in
that office during the 25 years following the recording of the
mortgage.
(h) (i)
An equity of redemption as
described in section 6060.
(i) (j)
The homestead of a family, after
the death of the
owner of the homestead, from the payment of his or her debts in all
cases during the minority of his or her children.
(j) (k)
An individual retirement account or
individual
retirement annuity as defined in section 408 or 408a of the
internal revenue code of 1986, 26 USC 408 and 408a, and the
payments
or distributions from such an that
account or annuity.
This exemption applies to the operation of the federal bankruptcy
code
as permitted by section 522(b)(2) of title 11 of the United
States
Code, 11 U.S.C. the
bankruptcy code, 11 USC 522. This
exemption
does not apply to any amounts contributed to an the
individual retirement account or individual retirement annuity if
the contribution occurs within 120 days before the debtor files for
bankruptcy. This exemption does not apply to an individual
retirement account or individual retirement annuity to the extent
that any of the following occur:
(i) The individual retirement account or individual retirement
annuity is subject to an order of a court pursuant to a judgment of
divorce or separate maintenance.
(ii) The individual retirement account or individual retirement
annuity is subject to an order of a court concerning child support.
(iii) Contributions to the individual retirement account or
premiums on the individual retirement annuity, including the
earnings or benefits from those contributions or premiums, exceed,
in the tax year made or paid, the deductible amount allowed under
section 408 of the internal revenue code of 1986, 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 of 1986,
26 USC 401, or an annuity contract under section 403(b) of the
internal revenue code of 1986, 26 USC 403.
(k) (l) 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 of 1986, 26 USC 401, or an annuity
contract under section 403(b) of the internal revenue code of 1986,
which
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 applies to the operation of the federal
bankruptcy
code, as permitted by section 522(b)(2) of title 11 of
the
United States Code, 11 U.S.C. the
bankruptcy code, 11 USC 522.
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 in the plan or annuity is subject
to
any 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.
(2)
The exemptions provided in this section shall do not
extend
to any lien thereon on the
exempt property that is excluded
from exemption by law.
(3) If the owner of a homestead dies, leaving a surviving
spouse
but no children, the homestead shall be is exempt, and the
rents and profits of the homestead shall accrue to the benefit of
the surviving spouse before his or her remarriage, unless the
surviving spouse is the owner of a homestead in his or her own
right.
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.