Filing for Chapter 7 bankruptcy in Maryland allows you to eliminate certain debts while keeping essential assets. State exemptions help protect your home, car, and personal belongings, ensuring you can maintain stability after bankruptcy.
Homestead exemption
Maryland law protects up to $25,150 of equity in your primary residence. This exemption applies to houses, condominiums, co-ops, and permanently affixed manufactured homes. Married couples cannot double this exemption when filing jointly.
Personal property exemptions
Maryland allows you to keep up to $1,000 in household goods, including furniture, appliances, books, clothing, and even pets. You can also exempt up to $5,000 in tools, instruments, and equipment necessary for your profession. However, this exemption does not cover motor vehicles used for work. An additional wildcard exemption of $6,000 applies to any personal property but not real estate.
Motor vehicle protection
Maryland does not offer a specific motor vehicle exemption, but you can use the wildcard exemption to protect equity in your car. If your vehicle’s value exceeds available exemptions, you may need to surrender or refinance it.
Retirement accounts and benefits
ERISA-qualified benefits and IRAs receive full protection under Maryland law. Bankruptcy does not affect these retirement savings. Additionally, certain benefits remain exempt, including:
- Disability or health benefits for sickness, accident, injury, or death.
- Court-ordered child support payments.
- A portion of wages: 75% of disposable earnings or $145 per week, whichever is greater.
Protecting essential assets
Maryland’s exemptions help you keep necessary property during and after Chapter 7 bankruptcy. Accurately listing assets and applying the correct exemptions ensures you retain as much as possible while eliminating debt.
