Determining Your Bankruptcy Exemptions In Maryland

While the state of Maryland has generally lower unemployment rates and bankruptcy filings, they still recorded over 25,000 petitions in 2009, with each of those choosing chapter 7 bankruptcy having to determine their Maryland bankruptcy exemptions. One of the major drawbacks to filing chapter 7 bankruptcy is the threat of having some of their property liquidated, or sold, to repay creditors. However, Maryland bankruptcy exemptions allow filers to protect much, if not all, of their property.

Chapter 7 Bankruptcy

While chapter 13 bankruptcy protects a filer’s property from liquidation, it does not discharge as much of their debts as chapter 7. In exchange for that discharge, a filer must choose the property exemptions available to them under Maryland bankruptcy law carefully. Maryland statutes do require that all filers choose state exemptions, not those offered by federal bankruptcy codes. Depending how much equity a filer has in their property, many may be able to protect most of their property, if not all of it.

Chapter 7 bankruptcy generally follows these steps:

Credit counseling – required to be taken through an agency approved by the United States Trustee

Filing forms and paying fees – including nearly $300 in fees and multiple forms

Automatic stay – which is a hold on all debt collection efforts by creditors during the bankruptcy process

Claiming property exemptions – which the filer is eligible for under Maryland bankruptcy laws

Creditors meeting – at which time the creditors may question the filer about their assets, debts, and plans for unsecured debts

Liquidation – of any property that is non-exempt and has sufficient value to be worth selling to pay creditors

Discharge – of most or all remaining debts that are eligible to be erased

Maryland Property Exemptions

Those filing chapter 7 bankruptcy in Maryland may choose exemptions from a number of general exemption categories:

Homestead – none

Household goods, furnishings, and equipment – up to $1,000 total

Other personal property – up to $5,000

Health aids

Burial plot

Prepaid college funds

Some earned but unpaid wages

Pensions – ERISA-qualified benefits, among others

Tools of the trade – up to $5,000

Getting Legal Help with Bankruptcy Property Exemptions in Maryland

Ensuring that all exemptions are claimed properly and that no available exemptions are missed is a complicated process that often requires the expertise of a knowledgeable bankruptcy attorney. Someone going through this difficult process should be sure they are taking full advantage of the benefits bankruptcy provides with skilled and experienced legal advice.

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