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.
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.
Here are some of the more common exemptions in Maryland. When reviewing them, you’ll want to keep these things in mind:
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.
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.
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.
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.
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.
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.
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.
Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:
You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?
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?