The cash in your account, the second car in the driveway, the tax refund on its way: in a Michigan bankruptcy, a single exemption often decides whether you keep them or sign them over to the trustee. That exemption is the wildcard, the most flexible shield you have.
And here is the part that catches almost everyone off guard. Michigan’s own exemption list has no wildcard at all.[1] You get one only by electing the federal exemption system, which Michigan lets you do. For cases filed on or after April 1, 2025, that federal wildcard protects $1,675 of any property, plus up to $15,800 of the homestead exemption you don’t use.[2]
Get that one choice wrong and the money is gone. Get it right and you can walk out of bankruptcy with thousands of dollars that a less-prepared filer would have lost.
What Is the Wildcard Exemption?
A wildcard exemption is a catch-all that protects almost any property up to a set dollar limit, and under the federal system that limit is $1,675 in 2025 before any homestead stacking.[2] Most exemptions are tied to one asset type, such as a homestead exemption for your house or a motor vehicle exemption for your car. The wildcard is not.
That flexibility is the whole point. You can apply it to cash, a tax refund, electronics, jewelry, or the leftover equity in a car that already used up its vehicle exemption. If a specific exemption doesn’t reach an asset, the wildcard often can.
The federal wildcard lives in 11 U.S.C. 522(d)(5), and it has two parts: a flat “any property” amount and an add-on drawn from the homestead exemption you don’t use.[3] Understanding that second part is where filers save the most.
Does Michigan Have a Wildcard Exemption?
No. Michigan’s bankruptcy exemption statute, MCL 600.5451, sets out specific categories only, with no general catch-all provision.[1] A Michigan debtor who wants wildcard protection must elect the federal exemptions instead, and federal law under 11 U.S.C. 522(b) leaves that door open because Michigan never opted out.[3]
So the honest answer to “the Michigan wildcard exemption” is that it comes from federal law, used by Michigan filers. In our experience, this is the single most misunderstood point about protecting assets in a Michigan case.
Watch out for one trap. A 2023-2024 bill, Senate Bill 409, proposed adding a Michigan wildcard and a much larger homestead, and some websites still describe those numbers as if they passed. They did not. The bill died when the legislative session ended, so it is not law.[6]
How Much Is the Federal Wildcard Exemption?
For cases filed on or after April 1, 2025, the federal wildcard protects $1,675 of any property, plus up to $15,800 of an unused homestead exemption, for a combined maximum near $17,475 per filer.[2] These amounts adjust every three years for inflation, and the current figures took effect for cases filed on or after April 1, 2025.[2]
The stacking works like this. The federal homestead exemption is $31,575.[5] If you rent, or your home has little equity, you leave most of that homestead unused. The rules let you move up to $15,800 of it into the wildcard, where it can protect anything you choose.
Federal Wildcard Exemption, by Adjustment Cycle
One caveat worth knowing. If you use a large chunk of the federal homestead to protect real home equity, less of it is left to feed the wildcard. The two draw from the same pool, so protecting the house can shrink your catch-all.[3]
Federal or Michigan Exemptions: Which Should You Choose?
Michigan is a “choice” state, which means you may elect the full federal set under 11 U.S.C. 522(d) or a Michigan state set, but you cannot mix them.[3] Because only the federal system includes a wildcard, understanding how federal and Michigan bankruptcy law differ can determine how much of your property you keep.
The trade-off usually comes down to your home. Michigan’s homestead exemption is generous, at $51,150 for most filers and $76,725 if you are 65 or older or disabled, for cases filed on or after April 1, 2026.[4] The federal homestead is lower, at $31,575.[5]
Homestead Exemption: Federal vs. Michigan (per filer)
Here is the practical rule of thumb we apply. If you have significant home equity, Michigan’s higher homestead often wins. If you rent or have little equity but want to protect cash and other property, the federal set and its wildcard usually protect more.[3]
One more difference matters for married couples. The federal amounts double when spouses file jointly, while Michigan’s homestead does not.[3] That alone can flip the math, so run both scenarios before you commit.
How the Wildcard Works in Chapter 7 and Chapter 13
The wildcard changes what you keep in Chapter 7 and Chapter 13, and of the 517,308 U.S. bankruptcies filed in 2024, some 494,201 were non-business consumer cases where exemptions decide asset outcomes directly.[7] The mechanics differ by chapter.
In Chapter 7, the trustee can sell property that isn’t exempt and use the proceeds to pay creditors. The wildcard shields assets, or the leftover value above another exemption, so the trustee cannot reach them. Cover an asset fully and it stays yours.[3]
In Chapter 13, you keep your property and repay creditors through a plan instead. Here the wildcard lowers the nonexempt value of your estate, which can reduce what you must pay unsecured creditors over the life of the plan. Less nonexempt value means a smaller required payment.
Want the full sequence? See our guide to the steps of Chapter 7 bankruptcy in Michigan, and, for homeowners weighing a repayment plan, Chapter 13 for Michigan homeowners.
What the Wildcard Can and Cannot Protect
The federal wildcard can protect almost any asset up to roughly $17,475 for a single filer, but value above that cap stays exposed.[2] Knowing both sides prevents costly surprises at filing.
Assets the Wildcard Commonly Protects
| Asset type | Why the wildcard helps |
|---|---|
| Cash and bank balances | No specific exemption covers plain cash, so the wildcard is often the only shield. |
| Tax refunds | A pending refund is an asset of the estate; the wildcard can protect it. |
| Second vehicle equity | Covers equity left over after the motor vehicle exemption is used up. |
| Electronics, jewelry, collectibles | Protects higher-value personal items that exceed household-goods limits. |
Where the Wildcard Falls Short
The wildcard is capped, so it struggles with big-ticket property. A luxury vehicle, a large savings balance, or valuable collectibles can exceed the limit, and the excess isn’t protected.[2] In Chapter 7 that surplus can be liquidated, and in Chapter 13 it raises your repayment obligation.
This is why timing and valuation matter so much. From what we’ve seen, filers who document asset values carefully, and who file at the right moment, protect far more than those who guess. A short planning conversation often pays for itself.
How to File and Claim the Wildcard Exemption
Claiming the wildcard is a paperwork step inside a larger process, and Michigan requires credit counseling within 180 days before you file.[8] Here is the sequence, condensed.
1. Choose Your Chapter and Exemption System
Decide between Chapter 7 and Chapter 13, then choose federal or Michigan exemptions. Only the federal set includes a wildcard, so this choice comes first.
2. Complete Credit Counseling
Finish a court-approved credit counseling course within 180 days before filing. It is mandatory for every individual filer.
3. Gather Your Documents
Collect pay stubs, tax returns, bank statements, and a full list of assets and debts. Accurate values drive an accurate wildcard claim.
4. File the Petition and Schedules
Submit your petition, schedules, and supporting forms to the correct Michigan bankruptcy court. Errors here cause delays or dismissal, so review them closely.
5. List and Claim the Wildcard
On Schedule C, identify each asset you want to protect and apply the wildcard, watching the limit. Overclaiming draws a trustee objection.
6. Attend the 341 Meeting
At the meeting of creditors, the trustee asks about your finances and exemptions under oath. Come ready to explain your wildcard claims.
7. Finish Post-Filing Requirements and Get Your Discharge
Complete the financial management course, then receive your discharge order. That order wipes out qualifying debts and closes the case.
Not sure what to bring? Our checklist on what you need to file Chapter 7 walks through every document.
Don’t Leave the Wildcard to Guesswork
The difference between a filer who plans and one who guesses is measured in thousands of dollars, and in the property you actually keep. That gap is won or lost in one conversation, before you file.
Frequently Asked Questions
Does Michigan Have a State Wildcard Exemption?
No. Michigan’s exemption statute, MCL 600.5451, lists only specific categories such as homestead, motor vehicle, and household goods, with no catch-all.[1] Filers who want a wildcard must elect the federal exemptions under 11 U.S.C. 522(d), which Michigan allows.
How Much Is the Federal Wildcard Exemption in 2025?
For cases filed on or after April 1, 2025, it protects $1,675 of any property plus up to $15,800 of unused homestead, near $17,475 for a single filer.[2] Joint filers may double these amounts.
Can I Use Both Michigan and Federal Exemptions?
No. You choose one full system for the whole case and cannot mix them.[3] Because only the federal set has a wildcard, the choice often turns on how much home equity you need to protect.
What Can the Wildcard Exemption Protect?
Almost any asset: cash, a tax refund, second-vehicle equity, electronics, jewelry, or collectibles.[2] It is most useful for property no specific exemption reaches, or for value above another exemption’s cap.
What Happens if an Asset Exceeds the Wildcard Limit?
The excess is not protected.[2] In Chapter 7 the trustee can sell the asset and return your exempt share; in Chapter 13 the nonexempt value increases what you repay unsecured creditors.
Sources
- Michigan Legislature. “MCL 600.5451 – Bankruptcy; exempt property.” legislature.mi.gov
- National Consumer Law Center. “April 1 Increase in Federal Bankruptcy Exemptions and Other Dollar Amounts.” 2025. library.nclc.org
- Legal Information Institute. “11 U.S.C. 522 – Exemptions.” Cornell Law School. law.cornell.edu/uscode/text/11/522
- Michigan Department of Treasury, Rachael Eubanks, State Treasurer. “Inflation Adjustments – Bankruptcy Exemptions,” signed January 30, 2026 (MCL 600.5451 adjusted amounts, effective for cases filed on or after April 1, 2026). michigan.gov/treasury. Corroborated by Miller Canfield, “Michigan Bankruptcy Exemptions Set to Rise Nearly 11% Effective April 1, 2026,” millercanfield.com.
- Nolo. “The Federal Bankruptcy Exemptions.” 2025. nolo.com
- Michigan Legislature. “Senate Bill 409 (2023-2024)” – bill history showing no Public Act; last action placed on second reading December 12, 2024 (not enacted). legislature.mi.gov
- Administrative Office of the U.S. Courts. “Bankruptcy Filings Rise 14.2 Percent” (calendar year 2024; 517,308 total filings, 494,201 non-business). uscourts.gov
- Legal Information Institute. “11 U.S.C. 109 – Who may be a debtor” (subsection (h), 180-day credit counseling requirement). Cornell Law School. law.cornell.edu/uscode/text/11/109
