January 26, 2017
If you file for Chapter 7 bankruptcy in Maryland, you can use Maryland’s bankruptcy exemption law to protect your property. Bankruptcy exemptions also play a role in determining how much you'll pay in a Chapter 13 case. Continue reading to learn about the property you can protect with Maryland’s bankruptcy exemptions.
Exemptions are specific laws that allow you to protect certain property, such as your car or home, from your creditors. Some states allow residents to choose between the state exemptions or the federal exemptions; however, because Maryland has opted out of the federal system, you'll be limited to the Maryland exemptions. You can supplement the state set with federal non-bankruptcy exemptions to protect property such as federal and military retirement funds and veteran’s benefits.
Below is a list of commonly used Maryland bankruptcy exemptions. Unless otherwise indicated, all references are to the Code of Maryland (Md. Code Ann.).
Up to $23,675 of equity in any owner-occupied real estate (house, condominium, co-op, or permanently affixed manufactured home. Married couples cannot double the Maryland homestead exemption. (Cts. & Jud. Proc. § 11-504(f)(1)(i)(2), Real Prop § 8-203(d)(3)(ii))
Up to $5,000 in tools of your trade, including clothing, books, tools, and inventory. (Cts. & Jud. Proc. § 11-504(b)(4))
Professionally prescribed health aids. (Cts. & Jud. Proc. § 11-504(b)(3))
Up to $1,000 in appliances and furnishings, clothing, pets, and books for use by you or your dependents. (Cts. & Jud. Proc. § 11-504(b)(4))
Burial plot. (Bus. Reg. § 5-503)
Maryland doesn't have a motor vehicle exemption, but you can use your wildcard exemptions to protect equity in your vehicle.
Court-ordered child support payments. (Cts. & Jud. Proc. § 11-504(b)(6))
75% of disposable earnings or $145 per week, whichever is greater (plus medical payments deducted by an employer), or, for residents of Caroline, Kent, Queen Anne’s and Worcester counties, 75% of disposable earnings or 30 times the federal minimum wage, whichever is greater (plus medical payments deducted by an employer). (Com. Law § 15-601.1)
Alimony in an amount equal to your earnings exemption. (Cts. & Jud. Proc. § 11-504(b)(7), Com. Law § 15-601.1)
Public assistance benefits. (Human Serv. § 5-407(a)(1), (2))
ERISA-qualified benefits and IRAs. (Cts. & Jud. Proc. § 11-504(h))
State employees retirement accounts and benefits. (State Pers. & Pens. § 21-502)
Cash or property up to $6,000 in value, plus an additional $5,000 of value in personal property. (Cts. & Jud. Proc. § § 11-504(b)(5), (f)(1)(i)(1))
(To learn more, see The Maryland Wildcard Exemption.)
Disability or health benefits, including court awards, arbitration awards, & settlements. (Cts. & Jud. Proc. § 11-504(b)(2))
Fraternal benefit society benefits. (Ins. § 8-431, Est. & Trusts § 8-115)
Life insurance or annuity contract proceeds when the beneficiary is the insured's dependent, child, or spouse. (Ins. § 816-111(a))
Settlements or awards that you receive as the result of any person's injury or illness or wrongful death; lawsuit or settlement awards for lost future earnings. (Cts. & Jud. Proc. § 11-504(b)(2))
This list includes some of the more common Maryland bankruptcy exemptions, but others exist. You can verify the current exemption amounts at the website of the Maryland General Assembly.