What Are Bankruptcy Exemptions?
When you hit a hard spot financially, you might be interested in filing for bankruptcy. This is a decision that takes a lot of consideration, as it stays on your record for years and can affect whether or not you get loans or other financial decisions you could make in the future. One of the biggest concerns that many people have when they want to file for bankruptcy is that they lose all of their major possessions.
However, that’s not true. There are exemptions in place to ensure that debtors maintain control of some things in their lives. The property that is protected from bankruptcy is what’s necessary for living, which also ensures that debtors will still be able to live their lives during and after filing.
Some states follow only federal regulations, but in Maryland there are both state and federal exemptions when it comes to bankruptcy.
Maryland Bankruptcy Exemptions
Filing for bankruptcy in Maryland doesn’t mean you’ll lose everything—state exemptions will keep creditors from taking everything you own and leaving you with nothing. State exemptions exist because you still need to be able to maintain a life even when you’ve fallen on hard times. Losing absolutely everything wouldn’t make sense when you’re already having financial trouble.
Here are some of the exemptions that you could utilize when you file for bankruptcy in Maryland, according to state code:
- Clothing, tools, books, instruments, or appliances not exceeding the value of $5,000 that are necessary for you to do your job or execute a trade.
- Compensation for damages after an accident.
- Your home up to the amount of $25,150.
- Professionally prescribed health aids for you or your children.
- Interest for household appliances and furnishings, goods, clothing, books, pets, and other personal items of the debtor that does not exceed $1,000.
- Cash or property that does not exceed $6,000.
- Any retirement plan you might have.
It’s important to note that a car is not listed in these exemptions. This means that your car could be part of your bankruptcy claim and you might not be able to keep your vehicle.
These are just the state exemptions that apply for bankruptcy. If you don’t see something here that you might think is exempt from your claim, then that could be under federal exemptions. Those apply to your claim when state exemptions don’t have policies for certain property that you might want to retain.
This can be difficult to figure out when you’re filing for bankruptcy. That’s why you could use the help of a bankruptcy lawyer. They’ll be able to look over the laws in place and determine what exemptions apply to you and your property. That way, you can feel sure knowing you keep the maximum amount of property that’s allowed.
Can I File for Maryland Exemptions?
Something else that is important to note is that there are stipulations and rules for who is eligible to claim the exemptions listed in Maryland Code. The main rule is that the debtor must have lived in Maryland for the last two years in order to claim all of the exemptions listed above in Maryland. If they haven’t lived in the state for two years, then the exemptions that apply to their case are likely the state where they lived the longest in the past two years.
If there isn’t a specific state that they have lived in the longest, then federal exemptions will apply to the debtor’s case. If you’re still unsure about which exemptions will apply to your case, then you should speak with a bankruptcy lawyer. With their experience, they’ll be able to tell you what applies to your claim, and what you can keep from creditors.
Belsky, Weinberg & Horowitz, LLC Will Help You Keep Your Property
We understand that filing for bankruptcy is a stressful and complicated process. That’s why we’re here to make it simpler for you. We have knowledge of Maryland bankruptcy laws, and can help you determine what you can keep in order to maintain normalcy in your life.
Our Maryland bankruptcy lawyers can guide you through the process and ensure that you get the best possible outcome for you claim. You shouldn’t have to struggle through the process and have to figure it out on your own. Reach out to our office today so we can get started on your claim.