Maryland Bankruptcy Laws
Three-quarters of Maryland clients choose Chapter 7. The good news is, there are some state exemptions that they can claim to protect some types and values of property. While there are federal exemptions as well, Maryland does not allow clients to claim them. The state exemptions include:
Homestead |
None |
Personal Property |
Burial plot; perpetual care trust funds; prepaid college funds; clothing, household goods, furnishings, appliances, and miscellaneous property up to $1,000 total; health aids; cash or property up to $6,000; other personal property up to $5,000 total |
Wages |
Wages earned but unpaid in Caroline, Kent, Queen Anne’s, and Worcester counties, either 75% of actual wages or 30 times the federal minimum wage, whichever is greater; in remaining counties, 75% or $145/wk., whichever is greater |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; state employees; ERISA-qualified benefits |
Public Benefits |
Unemployment; worker’s comp; Baltimore police death benefits; crime victims’ compensation |
Tools of the Trade |
Up to $5,000 of tools, books, instruments, and clothing |
Insurance |
Fraternal benefits; some life insurance or annuity proceeds, dividends, interest, loan, cash or surrender value; medical benefits deductions or payments; disability or health benefits |
The new bankruptcy reform requirements include credit counseling, which must take place before filing the bankruptcy petition. Once filed, the court will enact a stay on all collection activities by creditors and appoint a bankruptcy trustee to oversee the process. They will call a required 341 meeting with creditors to answer any questions about exemptions and bankruptcy plans. If all elements are in order, the petition may be granted, allowing the debtor to fulfill the plan and begin again, debt-free.
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