When you file a Chapter 13 bankruptcy in Maryland, you’re proposing a 3-year to 5-year repayment plan to all the creditors who have a claim against you. Many people choose to use Chapter 13 as a form of debt relief, because it can:

  • Help prevent foreclosure on your home

  • Give you time to make up missed car payments

  • Give you time to make up mortgage payments

  • Allow you to pay your back taxes

  • Stop interest from building on your tax debt

Chapter 13 allows you to keep valuable, exempt property, too, which means that you don’t have to liquidate all your assets as you would with a Chapter 7 bankruptcy.

What is Exempt Property in a Chapter 13 Bankruptcy?

The state of Maryland’s Chapter 13 bankruptcy law allows people who file for this type of debt relief to keep some of their property. It’s called exempt property because it doesn’t get counted in your case; you don’t have to sell it to repay your creditors.

Each state has its own list of exempt and non-exempt property, so if you file for bankruptcy in another state, you can expect to be able to keep (or have to give up) different things.

List of Exempt Property in a Maryland Chapter 13 Bankruptcy Case

You’re allowed to keep essential assets in a Maryland Chapter 13 case. Things like your home, some benefits, and certain pieces of personal property won’t be counted against you when you’re creating your repayment plan.

Benefits

If you receive disability or health benefits, or if you’ve been awarded a settlement in court, you’re allowed to keep it when you file Chapter 13 in MD. You may also keep benefits that come from:

  • A fraternal benefit society

  • Life insurance or annuity contract if you’re the insured person’s dependent, child, or spouse

  • Medical benefits deducted from your wagess

Businesses

You can keep the property of a business partnership when you file for this type of debt relief.

Pensions

If you file for Chapter 13 in Maryland, you may keep pensions related to:

  • Deceased Baltimore police officers

  • ERISA-qualified benefits (but not IRAs)

  • Service as a state employee

  • Service as a state police officer

Personal Property

You can keep personal property valued at up to $1,000 if it can be classified as:

  • Appliances

  • Furnishings

  • Household goods

  • Books

  • Pets

  • Clothing

You can also keep:

  • Burial plots or crypts

  • Health aids

  • Recoveries on lost future earnings

Public Benefits

If you receive public benefits, you’re entitled to keep:

  • General assistance

  • Crime victim compensation

  • Temporary Assistance for Needy Families, or TANF benefits

  • Unemployment benefits

  • Workers’ compensation

Tools of Your Trade

Supplies and tools that allow you to perform your job are exempt during a Chapter 13 bankruptcy. You may keep, up to a value of $5,000:

  • Appliances

  • Books

  • Clothing

  • Instruments

  • Tools

It’s important to note that this exemption doesn’t include your car, though.

What Else Can You Keep During Chapter 13?

In addition to exempt property, you can keep $6,000 of cash or property of any kind. You’re also entitled to hang on to up to $5,000 in real or personal property.

For many people, this means that Chapter 13 is the right debt relief solution. However, if you simply want to eliminate your debt without developing a repayment plan, Chapter 7 may be the best choice for you.

Do You Need to Talk to a Maryland Chapter 13 Attorney?

If you’re not sure which assets are exempt, or if you have specific questions, your Chapter 13 bankruptcy lawyer can help you figure out what you can keep during a Chapter 13 bankruptcy under Maryland law.

Call us at 301-933-2595 for a free Chapter 13 bankruptcy consultation. We’ll evaluate your situation and help you find the best possible options so you can take steps toward your financial freedom.