Ready to say goodbye to debt for good? Learn More
X

What Are the Maryland Bankruptcy Exemptions?

3 minute read Upsolve is a nonprofit that helps you get out of debt with education and free debt relief tools, like our bankruptcy filing tool. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card.  Explore our free tool


In a Nutshell

Maryland exemptions help you protect your home, belongings, and other essential property during the bankruptcy process. Many people who file are able to keep everything they own because it's protected by these laws. Maryland doesn't allow you to use the federal bankruptcy exemptions, but it does offer a wide range of protections—like coverage for home equity, tools of the trade, personal items, and certain money benefits. Some income sources, like child support, retirement accounts, and public benefits, are fully protected.

Written by Attorney Karra KingstonLegally reviewed by Jonathan Petts
Updated April 2, 2025


What Are Maryland Bankruptcy Exemptions and Why Are They Important in Chapter 7 Bankruptcy?

If you’re filing Chapter 7 bankruptcy in Maryland, exemptions are one of the most important things to understand. Bankruptcy exemptions are legal protections that let you keep certain property instead of having it sold to pay your creditors.

A common myth is that filing bankruptcy means losing everything you own—but that’s not how it works for most people. In fact, many Chapter 7 filers keep all of their property because it’s protected by exemptions.

Maryland’s bankruptcy exemptions are designed to protect everyday essentials. This includes things like your bed, clothes, basic household furniture, and work tools. These rules help make sure you’re not left without the basics you need to live and work.

That said, exemptions won’t usually protect luxury items like high-end jewelry, designer clothing, or expensive vehicles. If you own more than what the exemption laws cover, that property could be at risk in a Chapter 7 case.

Knowing what Maryland’s exemptions cover can help you figure out whether Chapter 7 is the right path and what you’re likely to keep. We’ll walk you through those protections in the next section.

Does Maryland Allow the Use of Federal Bankruptcy Exemptions?

If you’ve lived in Maryland for at least two years, the state requires you to use Maryland’s bankruptcy exemptions. You can’t use the federal bankruptcy exemptions listed in the U.S. Bankruptcy Code. However, you may still be able to use certain federal nonbankruptcy exemptions, which can protect things like retirement accounts connected to government jobs.

The list of Maryland exemptions is found in the Maryland Code, Courts and Judicial Proceedings § 11-504. We’ve outlined the key exemptions below to help you understand what property you may be able to keep.

Important Maryland Bankruptcy Exemptions

Maryland offers several exemptions that can help protect your home, belongings, and other essential property when you file Chapter 7 bankruptcy. Here's a breakdown of key exemptions available under Maryland law.

Real Property Exemptions: Maryland Homestead Exemptions

Maryland’s homestead exemption protects up to $31,575 in equity in your home or other residential real estate. This amount matches the current federal homestead exemption as of April 1, 2025, and it may be adjusted for inflation in future years.

Unlike some other states, Maryland does not allow married couples filing jointly to double the homestead exemption.

Personal Property Exemptions: 

  • Tools of the Trade: Clothing, books, tools, instruments, and appliances used in your work are protected up to a combined value of $5,000, as long as they’re necessary for your trade or profession. This doesn’t include inventory.

  • Health Aids: Medical devices and health aids that have been professionally prescribed are fully protected, with no dollar limit.

  • Household Goods and Personal Items: Clothing, furniture, books, household appliances, pets, and other personal belongings are exempt up to a total value of $1,000.

  • Wildcard Exemptions: You can protect up to $6,000 in cash or any kind of personal property. You may also use an additional $5,000 wildcard exemption to protect personal property of any kind during your bankruptcy case.

Money Benefits

Certain types of money you receive—or are entitled to receive—are protected under Maryland law when you file bankruptcy. Here’s a breakdown of what may be exempt:

  • Injury or Death-Related Payments: Money you recover because of an accident, illness, injury, or death is fully protected. This includes compensation for lost future earnings.

    • Note: If you’re receiving disability benefits, those benefits may not be protected from creditors if the debt was for basic necessities and was incurred after the disability began.

  • Child Support: Any child support you’re receiving now or expect to receive in the future is fully exempt. Creditors can’t take this money to pay off debts.

  • Alimony (Spousal Support): Alimony is protected, but only to the same extent that wages are. That means a portion may be protected, while the rest could be subject to garnishment depending on your situation.

  • Trust Property: If you have a beneficial interest in a trust that’s protected from creditors under Maryland law (specifically § 14.5-511 of the Estates and Trusts Article), that interest is also exempt in bankruptcy.

Earned and Unpaid Wages

  • These vary depending on the county you are filing for bankruptcy in. 

  • Caroline, Kent, Queen Anne’s and Worcester counties — greater of 75% of actual wages or 30 times the minimum wage limit set by the U.S. federal government

  • All other counties in Maryland the exemption is either 75% or $145 per week whichever is greater. - Com. Law §15-601.1

Retirement Accounts

  • Retirement funds are generally exempt. Any retirement plans deemed by the IRS as a tax-deferred can be fully protected with an exemption. Thus, creditors can’t go after it. Some examples include traditional and Roth IRAs, 401(k), 403(bs), profit sharing, money purchase plans. 

  • State employees can also fully exempt their pension plans 

  • Deceased Baltimore police officers 

  • ERISA-qualified benefits

  • State Police- MD Code Ann. 

Public Assistance

The following can be exempt so none of these assets will be liquidated:

  • Baltimore Police death benefits

  • Crime victims' compensation

  • General assistance

  • Unemployment compensation

  • Workers' compensation

Insurance Proceeds 

  • Life insurance or annuity contract proceeds when the beneficiary is the insured’s dependent, child, or spouse is fully exempt. Ins. 16-111(a)

Filing Chapter 7 Bankruptcy 

If you're confused about how to apply these Maryland exemptions to your bankruptcy case, you may want to speak with a bankruptcy attorney to get some legal advice. Maryland law can be confusing for people who have never seen it before. A Maryland bankruptcy attorney can guide you in the right direction and help you decide if Chapter 7 bankruptcy or Chapter 13 bankruptcy is the right decision for you. Many bankruptcy lawyers provide clients with free consultations. 

If a lawyer doesn't fit into your budget, don’t worry! Upsolve has free bankruptcy tools to help you file for bankruptcy on your own. 



Written By:

Attorney Karra Kingston

LinkedIn

Ms. Kingston began her career as a bankruptcy attorney. She has appeared in front of many federal court judges and has helped numerous debtors obtain a fresh start. Ms. Kingston understands the complex federal rules for discharging debt. While working as a bankruptcy attorney, Ms... read more about Attorney Karra Kingston

Jonathan Petts

LinkedIn

Jonathan Petts has over 10 years of experience in bankruptcy and is co-founder and CEO of Upsolve. Attorney Petts has an LLM in Bankruptcy from St. John's University, clerked for two federal bankruptcy judges, and worked at two top New York City law firms specializing in bankrupt... read more about Jonathan Petts

It's easy to get debt help

Choose one of the options below to get assistance with your debt:

Considering Bankruptcy?

Our free tool has helped 16,131+ families file bankruptcy on their own. We're funded by Harvard University and will never ask you for a credit card or payment.

Explore Free Tool
16,131 families have filed with Upsolve! ☆
or

Private Attorney

Get a free evaluation from an independent law firm.

Find Attorney
Assistant
Assistant
Meet Upsolve's AI Assistant
Debt is complicated- we're here to help! Ask any question about your current financial situation or your debt relief options. I will answer your questions based on Upsolve's expert-written articles. If upsolve doesn't have an article pertaining to your question, I will answer generally. I can only provide general information, not legal advice.
Our AI Assistant is still learning, so please review all responses. Your questions and the AI answers are anonymously recorded. Learn more about how we build reliable and safe AI.

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →
Y-Combinator

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families resolve their debt and fix their credit using free software tools. Our team includes debt experts and engineers who care deeply about making the financial system accessible to everyone. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.