A couple of common misperceptions of the bankruptcy process are that: 1. a person filing bankruptcy has to give up their property or that 2. a person filing bankruptcy can keep an unlimited amount of property and not have to repay debt. The reality is that you can generally keep all property which you can exempt and which is not the subject of a lien (i.e. mortgage or car loan). Additionally, you can keep more property if you pay for it in your bankruptcy plan.
Generally, Maryland exemptions are:
You may exempt $22,625 for a home which you live in. Presently, it is unclear as to whether this exemption may be used for both a husband and wife. If you and your spouse bought a home together it is exempt from your individual, but not your joint creditors.
$6,000 in cash or any property may be exempt.
Property besides Houses, buildings or land
Up to $5,000 total in any property plus you may exempt up to $1,000 total in Clothing, household goods, furnishings, appliances, books or pets. Exemptions are unlimited for a burial plot, a perpetual care trust fund, and prepaid college trust funds; health aids; personal injury recoveries, 75% of net wages, 75% of net alimony, child support, Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans), unemployment compensation, workers’ compensation, Baltimore police death benefits, crime victims’ compensation, public assistance benefits, tools of trade (this can include motor vehicles) up to $5,000, fraternal benefit society benefits, certain life insurance or annuity contract proceeds, dividends, interest, loan, cash, or surrender value if beneficiary is a dependent of the insured, medical benefits deducted from wages as well as medical insurance payments, disability or health benefits.