Exemptions Available when Filing for Bankruptcy in Maryland

Determining your bankruptcy exemptions is one of the most important decisions you can make in the course of filing for bankruptcy. Exemptions protect certain property from creditors. You get to keep that property, so it is important to use exemptions properly for important things like your house or car.

Exemptions differ from state to state. Additionally, there are federal exemptions that may apply. Depending on the state, you may be able to choose exemptions off both the state and the federal list. Most states, however, have passed laws prohibiting debtors from choosing off both lists. They must pick one or the other. In Maryland, the federal exemptions are not available. If you file for bankruptcy in Maryland, you must use Maryland exemptions only. A Maryland bankruptcy attorney can help you decide what bankruptcy exemptions apply for you and how to use them to your advantage.

Specific Maryland Bankruptcy Exemptions

Knowing what exemptions you have under Maryland bankruptcy law is important. Any property that qualifies under an exemption will be yours to keep. Creditors will not be able to get at it. The following are more details regarding some of the more important exemptions available in Maryland:

  • $12,000 in total exemptions. Generally, each debtor can have up to $12,000 in exemptions, which doubles for a married couple filing together. The $12,000 figure comes from adding up the exemptions listed below.
  • $1,000 in personal property. Personal property includes items like appliances, household goods, books, pets, and clothing.
  • $5,000 in tools of your trade. This means anything used in your course of business. It could include books, clothing, tools, or instruments.
  • “Wild card” exemption. You get to choose between a $6,000 exemption for cash or property of any kind and a $5,000 exemption for real or personal property. You cannot get both. Real property includes real estate and any improvements done to land. Personal property is any property not attached to land and includes things like furniture, jewelry, and cars.
  • Insurance benefits. You can continue to receive all of your health or disability benefits. Medical insurance benefit deductions from wages are exempt up to $145 per week or 75% of your disposable weekly wages, whichever amount is greater.
  • Pensions. You will continue to receive all of your pension payments.

Maryland has no homestead exemption, meaning that you cannot protect equity in your home if you file for bankruptcy. There may be other ways to protect your home, however, particularly if you are married. If you are considering filing for bankruptcy and would like to learn more about how exemptions work, contact a Washington DC bankruptcy lawyer at the Law Firm of Kevin D. Judd.

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