Michigan Judgment Debtor Exemptions: What Property Is Protected

Before spending money on garnishment writs and seizure orders, you need to know what you can't touch. Michigan and federal law protect specific categories of a debtor's income and property from judgment enforcement. Filing against exempt assets wastes your filing fees and disclosure fees with zero return.

Wage Garnishment Limits

Even when wages are garnishable, the law caps how much can be taken. The maximum is the lesser of 25% of disposable earnings or the amount exceeding 30 times the federal minimum wage ($217.50 per week). For low-income debtors, the 30× floor can reduce garnishment to nearly nothing.

Disposable earnings means gross pay minus mandatory deductions (federal/state/local tax, FICA, Medicare). Voluntary deductions like 401(k) contributions and health insurance stay in the calculation.

Fully Exempt Income

Certain income sources cannot be garnished at all:

• Social Security (retirement and disability benefits) — protected under federal law (42 U.S.C. 407)
• Supplemental Security Income (SSI) — fully exempt
• Veterans Affairs disability compensation and pensions — protected under 38 U.S.C. 5301
• Unemployment compensation — protected under MCL 421.30
• Workers' compensation — exempt under Michigan statute
• Public assistance and welfare payments — fully exempt under MCL 600.6023

When these funds are deposited directly into a bank account, the federal two-month lookback rule (31 CFR Part 212) protects them automatically. If the debtor's account received $1,800 in direct Social Security deposits during the bank's two-month lookback period, the bank must keep that amount accessible regardless of your garnishment writ.

Personal Property Exemptions (Seizure)

When you file for property seizure through Form MC 19, the following categories are protected under MCL 600.6023:

• Clothing and wearing apparel — 100% exempt for the debtor and their family
• Household goods and furnishings — exempt up to a statutory indexed limit (approximately $1,000–$3,000)
• Tools of the trade — tools, instruments, and books used in the debtor's profession are exempt up to approximately $1,000–$2,800
• Family pictures and records — 100% exempt
• One motor vehicle — Michigan has no blanket vehicle exemption, but practical constraints (liens, loan balances, depreciation) often leave no seizable equity

Real Estate Homestead Exemption

Michigan's homestead exemption under MCL 600.6023(1)(h)-(i) protects a portion of the debtor's equity in their primary residence:

• Standard homestead exemption: approximately $30,000 in equity
• Enhanced exemption for elderly or disabled homeowners: approximately $45,000

A judgment lien (Form MC 94) still attaches to equity above the exemption. If the debtor's home has $100,000 in equity, the lien would be effective against the roughly $70,000 above the standard exemption.

What This Means for Your Collection Strategy

If a debtor examination reveals that the debtor's only income is Social Security or public assistance, their bank account holds only exempt deposits, and their personal property falls within exemption limits, the debtor is effectively "judgment proof" — at least for now.

This doesn't mean the judgment is worthless. Michigan judgments last 10 years under MCL 600.5809(3) and are renewable for another 10. Interest continues accruing under MCL 600.6013. If the debtor gets a job, opens a funded bank account, or acquires property later, you can file a new debtor examination and pursue collection at that point.

The practical move for a currently judgment-proof debtor is to record a judgment lien against any real property they own (the lien attaches above the homestead exemption) and schedule periodic debtor examinations to monitor for changes in their financial situation.

For a complete asset-to-enforcement matching guide that accounts for these exemptions, the Michigan Judgment Collection Roadmap walks through which tools to use based on what the debtor actually has.

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