How to File Bankruptcy in Maryland

Updated May 29, 2019

When you’re having trouble making ends meet, bankruptcy can be the solution. But finding the information you need to file a bankruptcy case can be confusing and frustrating. Read on to learn where to find official bankruptcy forms, Maryland means testing information, approved credit counseling providers, and your local Maryland bankruptcy court. You’ll also find information about protecting property when you file bankruptcy in Maryland.

To learn more about choosing the right type of bankruptcy for you, start by reading What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

Maryland Bankruptcy Information

Federal law governs bankruptcy filings, but the laws of Maryland also come into play. Here’s what you need to know.

Means Testing and Credit Counseling Information

You’ll need two types of state-specific information to complete your paperwork: means testing figures and approved credit counseling providers. These can be found on the U.S. Trustee website.

• Means testing information. To qualify for a Chapter 7 bankruptcy, you must pass a “means test.” If your family income is less than the median for Maryland, you pass it and can file a Chapter 7 case. If your family income is above the median, you might still qualify after accounting for some pre-set expenses. You’ll find the income charts and expense guidelines on the U.S. Trustee’s website (select “Means Testing Information”). If you file a Chapter 13 case, a similar calculation will help you determine the amount of your Chapter 13 bankruptcy payment.
• Credit and debt education providers. Most individual filers must take two educational courses. You’ll participate in a credit counseling course before filing for bankruptcy and a debt management course afterward. The approved providers are listed on the U.S. Trustee website. Click “Credit Counseling & Debtor Education,” and scroll down to your bankruptcy district.

Maryland Bankruptcy Exemptions

Just because you file for bankruptcy doesn’t mean you have to give up all your property. But, you might not be able to exempt (protect) everything—although many people can do just that. What you can protect depends on the assets on Maryland’s exemption list.

The Chapter 7 trustee will sell any unprotected (nonexempt) property and distribute the proceeds to your creditors. If you file Chapter 13 instead, you won’t lose property, but you’ll pay the value of the property to your creditors as a part of your Chapter 13 plan payment.

Here’s a list of common Maryland bankruptcy exemptions.

• Homestead. Up to $25,150 of equity in any owner-occupied real estate (house, condominium, co-op, or permanently affixed manufactured home (married couples cannot double). (Cts. & Jud. Proc. § 11-504(f)(1)(i)(2), Real Prop § 8-203(d)(3)(ii).)
• Insurance and damages. 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)).
• Motor vehicles. Maryland doesn't have a motor vehicle exemption. You can use the wildcard exemption (see below) to protect equity in your vehicle.
• Personal injury, wrongful death, lost future earnings awards. (Cts. & Jud. Proc. § 11-504(b)(2).)
• Personal property. Up to $5,000 in tools needed in 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)).
• Public benefits, earnings, and support. 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)).
• Retirement benefits. ERISA-qualified benefits and IRAs (Cts. & Jud. Proc. § 11-504(h)); state employees retirement accounts and benefits (State Pers. & Pens. § 21-502).
• Tax-exempt retirement accounts. Including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined-benefit plans are also protected under 11 U.S.C. § 522(b)(3)(C) with some limitation. Learn more about retirement accounts in bankruptcy.
• Wildcard exemptions. 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).)

Maryland’s exemption amounts are adjusted periodically. To keep up to date with current figures, check for updates on the website for the General Assembly of Maryland.

Official Bankruptcy Forms

Every bankruptcy starts with a packet of paperwork called the bankruptcy schedules. Before the Maryland bankruptcy court discharges (eliminates) your debts, you’ll use those forms to disclose the details of your financial situation—income, expenses, property, debt, and property transactions.

You can fill them out on the official bankruptcy forms webpage at no cost. Then, you’ll file the paperwork with your local bankruptcy court along with a filing fee or fee waiver and proof that you’ve taken the required education course (more below).

Maryland Bankruptcy Court Locations

On the Maryland Bankruptcy Court website, you’ll find local rules and instructions for filing your paperwork (select “Filing Without an Attorney” in the navbar). The Maryland bankruptcy court has three divisions, but only two accept cases for filing. You’ll file your bankruptcy case at the courthouse that serves your county.

This overview provides some, but not all, of the necessary information needed in a bankruptcy case. Filing for bankruptcy without a lawyer can be challenging. You’re responsible for familiarizing yourself with the law. Consider purchasing a do-it-yourself book like How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D. to help you make well-informed decisions about your bankruptcy matter.