If you live in Maryland and file for bankruptcy, the Maryland homestead exemption protects equity in your home. Here you’ll find specific information about the homestead exemption in Maryland.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
The Maryland Homestead Exemption Amount
Under the Maryland exemption system, homeowners may exempt up to $21,625 of their home or other property covered by the homestead exemption. The Maryland homestead provision tracks the federal bankruptcy exemption for homesteads, stating that Maryland residents can protect whatever amount is allowed by the federal bankruptcy homestead exemption.
No Doubling for Married Couples
Some states allow married couples filing a joint bankruptcy to double the homestead exemption, but in Maryland you cannot double.
The Scope of the Maryland Homestead Exemption
In Maryland, the homestead exemption applies to real property, including your home, condominium, or co-op. You must own and occupy the property in order to protect it.
Can You Use the Federal Bankruptcy Exemptions in Maryland?
Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of the state exemptions. Maryland is not one of those states. If you reside in Maryland, you must use the state exemptions.
(To learn more about which state exemptions apply to you, see Which Exemptions Can You Use in Bankruptcy?)
In Maryland, the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy.
Can the Homestead Exemption Protect My Home Even if I Don't File for Bankruptcy?
If you have not yet filed bankruptcy and a creditor to whom you owe money or property serves you with a writ of garnishment, meaning the creditor is trying to take your property to satisfy the debt, you must file a response within thirty days and claim any applicable exemptions, including the homestead exemption. If you are served with a writ of garnishment, the document itself will explain the process of how to claim exemptions.
Real Property Held as Tenancy in the Entirety in Maryland
If property is held as a tenancy in the entirety, it means the property is jointly owned by a married couple as a single marital entity, not as individuals. Maryland permits tenancies by the entirety, and this may allow debtors to file bankruptcy and protect more than the homestead exemption amount.
If property is held as a tenancy in the entirety, it is owned as a whole by both married persons and creditors cannot take it to pay the debts of only one owner. For this reason, a tenancy by the entirety is often referred to as a “super exemption,” although it is not actually an exemption.
There are limits to the protection provided by a tenancy in the entirety, however. If the bankruptcy filer has tax debts, or if both spouses are liable for a debt (for example, joint credit card debt or medical debt incurred during the course of the marriage), a tenancy by the entirety will not provide protection in excess of the federal homestead exemption.
The Maryland Wildcard Exemption
Maryland also has a “wildcard” exemption that you can use to protect up to $6,000 in any property. You can combine the wildcard and homestead exemptions to protect up to $27,625 in your home.
The Maryland Homestead Exemption Eight Year Time Bar
The Maryland exemption has an unusual provision by which you cannot claim the homestead exemption if you successfully claimed it for the same property within eight years before you file bankruptcy. The eight year bar also applies if your spouse, child, child’s spouse, parent, sibling, grandparent, or grandchild successfully claimed the homestead exemption for the property you wish to protect.
Finding the Maryland Homestead Exemption Statute
Maryland’s homestead exemption is found in the Maryland Courts and Judicial Proceedings Code at Section 11-504. To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.
The section of the Maryland Code containing the homestead exemption may be reviewed at the website of the Maryland General Assembly at www.mlis.state.md.us.
The section of the U.S. Code containing the federal exemption amount (on which Maryland bases it’s homestead exemption amount) may be found at 11 U.S.C. 522. You can view the code online on the Office of Law Revision Counsel website at www.uscode.house.gov.
Periodic Adjustments of Maryland Exemption Amounts
While there are no scheduled periodic updates for the Maryland exemption laws, the federal homestead exemption amount, on which Maryland’s homestead exemption is based, is adjusted every three years on April 1, in accordance with the Consumer Price Index.