Bankruptcy is governed by federal law and its rules are basically the same from state to state. A Chapter 7 filing means that the debtor places his assets with the bankruptcy court, and the court divides them up among his creditors for payment. In a Chapter 13, the debtor has enough disposable income to at least partially pay his debts, and he asks the bankruptcy court for a reorganization plan to pay the balances owed. Under both filings, the debtor emerges from bankruptcy with most of his debts erased. Living in Maryland has several impacts on bankruptcy.
Places in Maryland to File Bankruptcy
Maryland has federal bankruptcy courts in two locations: Baltimore and Greenbelt. You must file based on the county in which you live. The U.S. Bankruptcy Court's website offers information regarding which courts cover Maryland's various counties.
Maryland's Income Limits for Bankruptcy Filings
If your average monthly income is less than Maryland's median income, you're eligible to file Chapter 7. Otherwise, you must either pass a stringent means test or you can file for Chapter 13 bankruptcy instead.
How Long Can My Chapter 13 Plan Be?
If your average monthly income is less than Maryland's median income, your Chapter 13 plan cannot exceed 36 months. However, you can sometimes get an extension to 60 months if the bankruptcy court finds that good cause exists. Otherwise, your Chapter 13 plan must generally be 60 months in length.
Maryland Exemptions From Bankruptcy Proceedings
Exemptions allow debtors to exclude certain property from the bankruptcy proceedings. In Maryland, most federal exemptions are not available. Some of the most common state exemptions in Maryland include:
- Residence: Maryland allows debtors the same exemption as the federal exemption, up to $21,625 for their home or other property.
- Wages: Either 75% of earned wages or the greater of 75% or $145 per week, depending on your county of residence.
- Clothing, household goods, furnishings, appliances, books and pets up to $1,000
- Personal property such as burial plots, perpetual care trust funds and prepaid college funds
- Professional books, tools, instruments, appliances and clothing up to $5,000
- Insurance: Fraternal society benefits, life insurance, annuities, disability or health benefits. Some medical benefits and payments are also exempted.
- Prescribed health aids
- Public benefits, including unemployment compensation, workers' compensation, Baltimore Police death benefits and crime victims compensation
- Other property valued at up to $5,000
- Miscellaneous exemptions for alimony with the same limits as wages, and child support
- $6,000 in cash or personal property if claimed within 30 days of attachment
- Any applicable federal non-bankruptcy exemptions
You cannot use any portion of the homestead exemption if you previously claimed the exemption in another bankruptcy proceeding within the past eight years.
Get Help From A Bankruptcy Attorney
Bankruptcy laws in Maryland are complicated and each case is unique. While this article provides a brief, general introduction to the topic, you should contact a local bankruptcy lawyer.