Bankruptcy is a system of federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Maryland. However, Maryland plays an important role, especially in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important state-specific resources available to you.
Maryland Credit Counseling
Before you file for Chapter 7 or Chapter 13 bankruptcy in Maryland, you will have to get credit counseling from an agency approved by the United States Trustee’s Office. Here’s a list of agencies that have been approved to provide this counseling in Maryland.
Where to File for Bankruptcy
Maryland has federal bankruptcy courts in Baltimore, Greenbelt, and Salisbury. You can find information on filing for bankruptcy, as well as forms, and local rules, at the Maryland bankruptcy court’s website.
Like every other state, Maryland has a list of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
Some states allow bankruptcy filers to choose between the state’s exemptions and a federal exemption list, but Maryland doesn’t offer this choice.
Bankruptcy filers in Maryland may exempt up to $22,975 in home equity; spouses who file together may double this amount, for a total homestead exemption of $45,950. Maryland filers may also claim a total exemption of $1,000 for clothing, household goods and furnishings, appliances, books, and pets. Here is a detailed list of Maryland exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median state income in Maryland for a household of your size. If your income is less than the Maryland median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
The median income in Maryland for a four-person household is around $101,000; these figures change frequently. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
Maryland Debtor Education
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here is a list of agencies in Maryland that are currently approved to provide this counseling.
Finding a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Maryland bankruptcy lawyer.