Bankruptcy in Maryland (2026): Exemptions & Means Test

Maryland is a state where the property rules in bankruptcy come almost entirely from state law. Maryland has opted out of the federal bankruptcy exemptions, so filers must use Maryland's own exemptions in the Courts and Judicial Proceedings Article, section 11-504. For decades Maryland was unusual in offering no homestead exemption at all, but it now has a modest homestead plus a flexible $6,000 wildcard. The figures below are current as of mid-2026, and you should confirm the latest amounts before relying on them.

This page is general legal information, not legal advice. It is part of our Bankruptcy by State series.

Does Maryland use state or federal bankruptcy exemptions?

Maryland uses its own exemptions. Md. Code, Courts and Judicial Proceedings 11-504(g) states plainly that in any bankruptcy proceeding a debtor is not entitled to the federal exemptions in 11 U.S.C. 522(d). That makes Maryland an opt-out state, like roughly two-thirds of the country. Maryland filers cannot mix and match; they use the Maryland list.

Tax-qualified retirement accounts remain protected. Section 11-504(h) exempts money in plans qualified under Internal Revenue Code sections such as 401(a), 403(b), 408, and 408A, which covers most 401(k) and IRA balances. Federal nonbankruptcy exemptions, such as Social Security, also continue to apply.

Maryland homestead exemption

Maryland's homestead is the part of this cluster that surprises people. For most of its history Maryland had no homestead exemption, and a filer protected home equity only through the general $6,000 wildcard. The state later added a homestead that exists only in bankruptcy. Under 11-504(f), an individual debtor domiciled in Maryland may exempt owner-occupied residential real property, a condominium, a manufactured home converted to real property, or a cooperative interest, up to the amount in 11 U.S.C. 522(d)(1), adjusted under 11 U.S.C. 104.

Because the cap tracks the federal homestead figure, it is $31,575 for cases filed on or after April 1, 2025, and it is scheduled to adjust again on April 1, 2028. Two limits apply: the homestead cannot be claimed by both a husband and wife in the same bankruptcy, and it cannot be claimed if the same person, or a close relative, successfully claimed it on that property within the prior eight years. Confirm the current figure before filing, since the federal amount it tracks moves on a three-year cycle.

Wildcard, vehicle, and personal-property exemptions

Maryland leans heavily on a flexible wildcard rather than a long list of category-specific exemptions:

• Wildcard: up to $6,000 of cash or property of any kind under 11-504(b)(6), claimed within 30 days of an attachment or levy. This is the workhorse exemption and is commonly used to protect vehicle equity.
• Deposit accounts: up to $500 in a deposit account held at a bank, credit union, or similar institution is exempt automatically under 11-504(b)(5), with no election by the debtor. It does not stack on top of the wildcard: item (b)(6) caps the cumulative value exempted under items (5) and (6) together at $6,000.
• Additional personal property in bankruptcy: up to $5,000 under 11-504(f)(1)(i)1, available specifically in bankruptcy cases on top of the other exemptions.
• Household furnishings, goods, clothing, books, and pets: up to $1,000 under 11-504(b)(4).
• Tools of the trade, including apparel, books, and instruments necessary for a trade or profession: up to $5,000 under 11-504(b)(1).
• Health aids: professionally prescribed health aids are fully exempt under 11-504(b)(3).
• Retirement accounts: tax-qualified plans are exempt under 11-504(h).

Notably, Maryland has no separate motor-vehicle exemption. Filers protect a car by applying the $6,000 wildcard, and sometimes the additional $5,000 personal-property allowance in bankruptcy, to the vehicle's equity. Section 11-504 itself contains no wage exemption, and subsection (e) states that the exemptions in that section do not apply to wage attachments. Earned but unpaid wages are protected by a different statute: Md. Code, Commercial Law 15-601.1(b) exempts from attachment the greater of 75 percent of disposable wages due or 30 times the State minimum hourly wage in effect when the wages are due, multiplied by the number of weeks in which those wages were earned. A Maryland filer reaches that protection in bankruptcy through 11 U.S.C. 522(b)(3)(A), which imports state-law exemptions generally rather than only exemptions written for bankruptcy.

The Chapter 7 means test in Maryland

The means test screens who can file Chapter 7. It first compares your household's current monthly income, annualized, against the median family income for a Maryland household of the same size. If your income is at or below the Maryland median, you generally qualify for Chapter 7. If it is above, you complete the longer calculation that deducts allowed living expenses to determine whether you have disposable income that should fund a Chapter 13 plan.

The U.S. Trustee Program publishes the median figures. For cases filed on or after April 1, 2026, the Maryland median family income is:

Add $11,100 for each additional person beyond four. These figures were published February 12, 2026 and apply only to cases filed on or after April 1, 2026. The U.S. Trustee Program revises them about twice a year, so confirm the figures for your filing date.

Chapter 7 vs. Chapter 13 in Maryland

Chapter 7 is a liquidation in which a trustee may sell non-exempt property to pay creditors. Because Maryland's exemptions are relatively modest, a filer with significant home equity or a paid-off vehicle should think carefully about what the wildcard and homestead can actually cover. Most remaining unsecured debt, like credit cards and medical bills, is discharged within a few months.

Chapter 13 is a reorganization for people with regular income. You keep your property and repay part or all of your debt over three to five years. It is often used by homeowners who are behind on a mortgage, since the plan can cure the arrears over time and stop a foreclosure.

In both chapters, filing triggers the automatic stay under 11 U.S.C. 362, which immediately stops most collection activity, including foreclosure, wage garnishment, repossession, and collection calls.

Where you file bankruptcy in Maryland

Maryland bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Maryland, the single federal bankruptcy district covering the whole state. The court sits in Baltimore and Greenbelt. Federal law requires approved credit counseling before you file and a debtor-education course before your debts are discharged.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts, but several categories generally survive: most student loans (absent a separate showing of undue hardship), recent income taxes, child support and alimony, and debts from fraud or willful injury. Secured debts like a mortgage or car loan continue if you keep the collateral and keep paying.

Because Maryland's exemptions are limited and the homestead exists only in bankruptcy, the choice between Chapter 7 and Chapter 13 can hinge on small details. Many people consult a licensed Maryland bankruptcy attorney before filing.