HOUSE BILL No. 5682

January 31, 2008, Introduced by Rep. Caul and referred to the Committee on Judiciary.

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending sections 6023 and 6027 (MCL 600.6023 and 600.6027),

 

section 6023 as amended by 1998 PA 61.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 6023. (1) The following property of the debtor and the

 

debtor's dependents shall be is exempt from levy and sale under any

 

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 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 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 , or 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 insured person, whether the debt

 

or liability of such the insured person or beneficiary was incurred

 

before or after the accrual of benefits under the insurance policy

 

or contract. , except that the However, this exemption 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 who is 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 not exceeding $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.

 

     (h) A homestead of not exceeding 40 acres of land and the

 

dwelling house and appurtenances on that homestead, and not

 

included in any recorded plat, city, or village, or, instead, and

 

at the option of the owner, a quantity of land not exceeding in

 

amount 1 lot, being 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 any house on land not his or her own and which the person

 

claims as a homestead. However, this exemption does not apply to

 

any mortgage on the homestead, lawfully obtained, except that the

 

mortgage is not valid 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) Subject to subsection (4), a homestead, limited to the

 

following:

 

     (i) If the debtor or the debtor's spouse is 65 years of age or

 

older, 100% of the homestead's value that is $150,000.00 or less

 


and 75% of the homestead's value that exceeds $150,000.00.

 

     (ii) If subparagraph (i) does not apply, the homestead's value

 

that does not exceed $3,500.00.

 

     (i) An equity of redemption as described in section 6060.

 

     (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.

 

     (k) An individual retirement account or individual retirement

 

annuity as defined in section 408 or described in section 408a of

 

the internal revenue code, of 1986 26 USC 408 and 408a, and the

 

payments or distributions from such an 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. 522 the bankruptcy code, 11 USC 522. This exemption

 

does not apply to any amounts the amount contributed to an

 

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 1 or more of the following occur apply:

 

     (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.

 

     (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. 522 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 1 or both 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 property 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.

 

     (4) The homestead exemption under subsection (1)(h) does not

 

apply to a lawfully obtained mortgage on the homestead. However, if

 

the debtor is married and the debtor's spouse did not sign the

 

mortgage, the exemption applies to the mortgage unless 1 or both of

 

the following apply:

 

     (a) The mortgage was given to secure the payment of all or a

 

portion of the purchase money for the homestead.

 

     (b) The mortgage has been recorded in the office of the

 

register of deeds of the county in which the homestead is located

 

for 25 years or more and notice of a claim of invalidity has not

 

been filed in that office during the 25 years following the

 

recording of the mortgage.

 

     (5) As used in this section, "homestead" means the following:

 

     (a) Land, limited to the following size, and the house and

 

appurtenances on it owned and occupied by a resident of this state:

 

     (i) If the homestead is not located in a recorded plat, city,

 

or village, 40 acres or less.

 


     (ii) If the homestead is located in a recorded plat, city, or

 

village, 1 lot or a fraction of a lot.

 

     (b) A house owned and occupied by a resident of this state

 

that is on land not owned by the resident.

 

     Sec. 6027. If the homestead of any debtor is appraised at a

 

value of more than $3,500.00, that exceeds the available exemption

 

under section 6023 and cannot be divided, the debtor shall not for

 

that reason lose the benefit of may still claim the exemption, ;

 

but in such cases the levying officer shall deliver a notice,

 

attached to a copy of the appraisal, to the debtor or to some of

 

his a member of the debtor's family of suitable age to understand

 

the nature thereof of the notice, that unless the debtor pay pays

 

the officer the surplus over and above the $3,500.00, amount that

 

exceeds the exemption or the amount due on the execution within 60

 

days thereafter after the delivery of the notice, the premises will

 

be sold.