Property You Can Keep After Declaring Bankruptcy

Maryland Bankruptcy Exemptions

In Maryland, you can keep certain property even if you file for bankruptcy. This property is called "exempt". Below is a list of common exemptions, but you should refer to the law for a complete list of exemptions.

Exemptions discussed:

• Residence: Homestead
• Insurance and Damages
• Motor Vehicles
• Personal Property
• Public Benefits, Earnings, and Support
• Retirement Benefits
• Wildcard Exemption

Residence: 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 this exemption. 
• Residential security deposits are included under this exemption.  A security deposit is exempt in a bankruptcy involving either the landlord or tenant.

Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(f)(1)(i)(2), Real Property § 8-203(d)(3)(ii)

Insurance and Damages 

The following benefits, claims, or awards are exempt from the bankruptcy estate and there is no limit on the exemption:

• Disability or health benefits, including court awards, arbitration awards, & settlements 
  • This exemption protects money payable in the event of sickness, accident, injury, or death, including compensation for loss of future earnings.
  • This exemption does not include money you receive for injuries to your property. If you receive money for unfair wages in a sexual harassment case, this part of the compensation is not protected from creditors.
  • This exemption does not include disability income benefits that you receive for necessities that you contract for after your disability started.
    • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(b)(2)
• Fraternal benefit society benefits 
  • Read the law: Md. Code, Insurance § 8-431, Estates and Trusts § 8-115
• Life insurance or annuity contract proceeds when the beneficiary is the insured's dependent, child, or spouse 
  • Read the law: Md. Code, Insurance § 16-111(a)

Motor Vehicles 

Maryland does not have a motor vehicle exemption. You can use the wildcard exemption (see below) to protect the equity in your vehicle.

Personal Property

• Tools needed in your trade 
  • Exemption amount: Up to $5,000
  • This exemption protects the tools needed in your trade, including clothing (such as uniforms), books, tools, instruments, appliances and inventory used in your work. 
  • This exemption does not include work-related items that you sell or trade. The exemption does not protect a motor vehicle used for your work.
    • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(b)(1) 
• Professionally prescribed health aids 
  • Exemption amount: Unlimited
  • This exemption protects not only your health aids but also health aids that belong to your dependents.
    • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(b)(3) 
• Household furnishings and goods 
  • Exemption amount: Up to $1,000
  • This exemption protects appliances, books, furniture, clothing, stereo equipment and even pets that belong to you or your dependents. This exemption applies to anything used in or around the house used to maintain the house or in your day-to-day living
    • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(b)(4)
• Personal property wildcard 
  • Exemption amount: Up to $5,000
  • This exemption allows you to claim additional personal property. This exemption cannot be used to exempt real estate.
    • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(f)(1)(i)(1) 
• Burial plot 
  • This exemption protects a burial plot purchased for burial of the debtor. This exemption does not apply to burial plots purchased by the debtor as an investment, and not held for the burial of the owner.   
    • Read the law: Md. Code, Business Regulation § 5-503

Public Benefits, Earnings, and Support 

• Court-ordered child support payments 
  • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(b)(6)
• Wages
  • Earned but unpaid wages have exemptions that vary according to county.
  • 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).
  • For other counties: 75% of disposable earnings or $145 per week, whichever is greater (plus medical payments deducted by an employer).
    • Read the law: Md. Code, Commercial Law § 15-601.1
  • Learn more about wage exemptions.
• Alimony in an amount equal to your earnings exemption 
  • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(b)(7), Commercial Law § 15-601.1
• Public assistance benefits 
  • Read the law: Md. Code, Human Services § 5-407(a)(1),(2)

Retirement Benefits 

• ERISA-qualified benefits and IRAs 
  • Read the law: Md. Code, Courts and Judicial Proceedings § 11-504(h)
• State employees' retirement accounts and benefits 
  • Read the law: Md. Code, State Personnel and Pensions § 21-502

Wildcard Exemption 

Cash or property up to $6,000 in value.

• Once a sheriff attaches or places a levy against your property, you must notify the court within 30 days to claim your exemption.
• The wildcard exemption can be used to protect the equity in your vehicle.
• The entire, or any unused portion of the $6,000 exemption may be applied and added to the owner-occupied residential realty exemption of $25,150.00, resulting is a maximum individual statutory exemption of residential equity of $31,150.00

Read the law: Md. Code, Courts and Judicial Proceedings § § 11-504(b)(5)(1)