Maryland Bankruptcy Exemptions

If you file for Chapter 7 bankruptcy in Maryland, you can use Maryland’s bankruptcy exemptions to protect your property. Maryland’s bankruptcy exemptions also play a role in Chapter 13 bankruptcy. Continue reading to learn about what property is protected by Maryland’s bankruptcy exemptions.

The Bankruptcy Exemptions in Maryland

Exemptions are specific laws that allow you to protect certain property from your creditors, such as your car or home. If you file a Chapter 7 bankruptcy, you can keep the items that are protected by Maryland’s bankruptcy exemptions. If you file for Chapter 13 bankruptcy, Maryland’s bankruptcy exemptions play a role in how much you repay your creditors through your Chapter 13 plan.

Maryland Requires Debtors to Use State Exemptions

Maryland has its own exemption laws and has opted out of the federal bankruptcy exemptions, which means that when you file a bankruptcy in Maryland, you may only exempt property using the Maryland exemptions. You may, however, also use any of the applicable federal non-bankruptcy exemptions. The federal non-bankruptcy exemptions protect property such as federal and military retirement funds and veteran’s benefits.

Married Couples May Double Maryland Exemptions

Married couples that file a joint bankruptcy in Maryland are allowed to “double” the exemptions. This means that you and your spouse may each claim the full exemption amount for any property belonging to you. You may only claim an exemption and protect property that belongs to you.

To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Nolo’s Bankruptcy Exemptions topic page.

Commonly Used Maryland Bankruptcy Exemptions

Below is a list of commonly used Maryland bankruptcy exemptions. Unless otherwise indicated, all references are to the Maryland Code Annotated.

Homestead

Up to $21,625 of equity (if your home is worth $120,000 and you owe $60,000 on the mortgage, you have $60,000 of equity in your home) in any real property (house, condominium, or co-op) that you use as a residence. The Maryland homestead exemption may only be claimed once every eight years and married couples may not double the homestead exemption. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(f)

To learn more, see The Maryland Homestead Exemption.

Personal Property

Up to $5,000 in tools of your trade, including clothing, books, tools, and inventory. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(b)(1)

Professionally prescribed health aids. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(b)(3)

Appliances and furnishings, clothing, pets, and books for use by you or your dependents. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(b)(4)

Burial plot. Md. Code Ann., [Bus. Reg.] § 5-503

Maryland does not have a motor vehicle exemption, but you may use your wildcard exemptions to protect equity in your vehicle.

Public Benefits & Support

Court-ordered child support payments. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(b)(6)

Alimony, to the extent that wages are exempt from attachment under § 15-601.1(b)(1)(ii) or (2)(i) of the Commercial Law Article. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(b)(7)

Public assistance benefits - Human Services § 5-407(a)(1),(2)

Retirement Benefits

ERISA-qualified benefits and IRAs. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(h)(1)

State employees retirement accounts and benefits. Md. Code Ann., [State Pers. & Pen.] § 21-502

Wildcard Exemptions

Cash or property up to $6,000 in value. Md. Code Ann., [Cts. & Jud. Proc] § 11-504(b)(5) and an additional $5,000 of value in personal property. Md. Code Ann. [Cts. & Jud. Proc] § 11-504(f)(1)(i)(1)

Insurance and damages

Disability or health benefits, including court awards, arbitration awards, & settlements. Md. Code Ann., [Cts. & Jud. Proc.] § 11-504(b)(2)

Fraternal benefit society benefits. Md. Code Ann., [Ins.] § 8-431; Md. Code Ann., [Est. & Trusts] § 8-115

Life insurance or annuity contract proceeds when beneficiary is the insured's dependent, child, or spouse. Md. Code Ann., [Ins.] § 16-111 (a); Md. Code Ann., [Est. & Trusts] § 8-115

Medical insurance benefits deducted from wages plus medical insurance payments to $145 per week or 75% of disposable wages. Md. Code Ann., [Com. Law] § 15-601.1 (3)

In re Stine, 360 F.3d 455 (4th Cir 2004); Bank of America v. Stine, 379 Md. 76, 839 A.2d 727, 729 (2003)

Confirming the Maryland Bankruptcy Exemptions

This list includes some of the more common Maryland bankruptcy exemptions, but there are numerous other exemptions available to protect specific property. You can verify the current exemption amounts at the website of the Maryland General Assembly or by checking the statutes yourself. (To learn how to do this, see Nolo’s Legal Research Center).