Maryland Bankruptcy Exemptions

You can protect property in a Maryland bankruptcy using Maryland's bankruptcy exemption laws.

You won’t lose everything when filing for bankruptcy in Maryland. You’ll be able to use Maryland’s bankruptcy exemptions to protect property you’ll need to work and live, such as your home, personal items, and a retirement account.

Learn more about filing a Maryland bankruptcy case.

Maryland Exemptions v. Federal Bankruptcy Exemptions

Some states allow residents to choose between the state and the federal bankruptcy exemptions, but that option isn’t available in Maryland. You’ll use Maryland’s state exemptions and, if helpful, the federal nonbankruptcy exemptions.

Common Maryland Bankruptcy Exemptions

Here are some of the more common exemptions in Maryland. When reviewing them, you’ll want to keep these things in mind:

  • Joint filing. Unless otherwise noted, when spouses file together in Maryland, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
  • Legal citations. You’ll find each of the statutes in the Maryland Code Annotated or the federal law.

Maryland Homestead Exemption

Cts. & Jud. Proc. 11-504(f)(1)(i)(2) - Equity in residential property that you occupy up to $23,675. A manufactured home permanently affixed to real estate will qualify. Spouses can’t double this exemption. Equity in property held by a married couple as tenants by the entirety might have additional protections.

Maryland Motor Vehicle Exemption

None.

Maryland Wildcard Exemption

Cts. & Jud. Proc. 11-504(f)(1)(i)(1) – Up to $5,000 worth of personal property (anything other than real estate).

Cts. & Jud. Proc. 11-504(b)(5) - $6,000 in cash or any property if claimed within 30 days of attachment or levy.

Other Maryland Bankruptcy Exemptions

Personal Property

Cts. & Jud. Proc. 11-504(b)(4) - Clothing, household goods, furnishings, appliances, books, and pets up to $1,000 total.

Cts. & Jud. Proc. 11-504(b)(3) - Prescribed health aids.

Cts. & Jud. Proc. 11-504(b)(2) - Payments due to sickness, accident, injury, or death.

Bus. Reg. 5-503 - Burial plot or crypt.

Educ. 18-1913 - Prepaid college trust funds.

Pensions

11 U.S.C. § 522 - 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) and IRAS and Roth IRAs to the maximum amount. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)

Cts. & Jud. Proc. 11-504(h)) - ERISA-qualified benefits, including IRAs, Roth IRAs, and Keoghs.

State Pers. & Pens. 21-502 - State employees.

Public Benefits

Lab. & Empl. 8-106 - Unemployment compensation.

Lab. & Empl. 9-732 - Workers' compensation.

Crim. Proc. 11-816 - Crime victims' compensation.

Human Serv. 5-407(a)(1), (2) - Public assistance benefits.

Tools of the Trade

Cts. & Jud. Proc. 11-504(b)(1) - Tools, books, instruments, appliances, and clothing needed for work up to $5,000.

Insurance

Ins. 8-431 & Est. & Trusts 8-115 - Fraternal benefit society benefits.

Ins. 16-111(a) - Life insurance or annuity contract proceeds, dividends, interest, loan, cash, or surrender value if the beneficiary is a dependent of the insured.

Other

Cts. & Jud. Proc. 11-504(b)(6) - Court-ordered child support.

Cts. & Jud. Proc. 11-504(b)(7) - Alimony is exempt in an amount equivalent to that allowed for wagest.

Corps. & Ass'ns 9A-502 - Specific partnership property.

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a Maryland Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Maryland Exemptions

This list includes the majority of bankruptcy exemptions available in Maryland. However, doesn’t include all exemptions. Also, states often create qualification requirements for specific exemptions, and Maryland might have changed the amounts since this list was last updated. Check the Maryland Code Annotated or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

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