One universal fear whenever folks are thinking of filing bankruptcy is whether they are going to lose their valued possessions. For most folks they are worried about losing their home, car or tax refunds.
Most folks are relieved to know that just because you file for bankruptcy does not mean you lose everything. The law has a way to protect some of your property. This is accomplished through the of exemptions. Exemptions are laws that keep certain property out of bankruptcy and reach of your creditors. The exemptions vary by state and therefore you have to ensure you understand what state’s exemptions you can use.
Here are some of the exemptions in Maryland.
Homestead Exemption
Homeowners in Maryland can protect up to $22, 975.00 in equity in their homes. This means those with a little bit of equity in their homes can still file for bankruptcy without worrying about the possibility of having to sell or surrender their home to pay off creditors.
Tenants by Entirety
Married folks who own their own together can protect the home and any equity in it from creditors of either spouse. This means creditors cannot go after the home for debt in one spouse’s name only.
Personal Property Exemption
Maryland has a $5,000.00 exemption to cover your personal property. This exemption covers your car, clothing, bank account, tax refunds, stamp collection etc.
Household Good Exemption:
Maryland has a $1,000.00 exemption for household goods and furnishings such as sofas, tvs and beds.
Wild Card Exemption
Folks filing bankruptcy in Maryland are well served by this catchall exemption that give you up to $6,000.00 to exempt on whatever asset you own. You can use this to protect equity in your home or car, protect a collectible item or whatever else you desire.
Most importantly in this tax season you can use the Wild Card Exemption or the Personal Property Exemption to make sure you keep all of your tax refunds this year. Therefore, if you suffering under the weight of too much debt or under threat of garnishment you do not have to wait until tax season is over. You can start your journey to a fresh start now and still keep you refund.
As always, this is a brief overview of a complex legal issue and you should consult a knowledgeable bankruptcy lawyer before taking any action.
Joseph K. Githuku
9407 Harford Rd
Baltimore, MD 21234
410-849-9529
