Filing for bankruptcy is not something that anyone wants to do, but circumstances sometimes dictate that it is necessary. Some people think that it means losing everything to discharge debts, but there are some things that are exempt.
Here are a few of the more common exemptions you might run into.
Support and public benefit earnings
This includes child support payments. It can also include some earnings and public assistance benefits.
Retirement accounts and benefits
Some retirement plans like Individual Retirement Accounts (IRAs), accounts under the Employee Retirement Security Act (ERSA) and other employer-sponsored accounts have almost unlimited protection.
Tax-exempt accounts are also bankruptcy exemptions. Although there are some limitations to this, the majority are at least partially exempt.
Some of your personal property is also exempt under bankruptcy proceedings. This includes tools of your trade, clothing and books. The courts also allow for prescribed health aids and medical equipment. You can also keep some of the appliances, books and clothing for your dependents.
Some awards for disability, lawsuits and other settlements may be exempt. This includes loss of future earnings and disability settlements. You can also claim certain insurance awards and benefits payable to you.
There are different equity limits when it comes to keeping your home. The courts usually base this off your home’s value at the time of the bankruptcy.
These are only a few of the exemptions under Maryland bankruptcy law. Bankruptcy does not have to mean giving up everything you own. Check with your county to find out what you can claim an exemption for.