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Protect Your Assets with Bankruptcy Exemptions

A Chapter 7 bankruptcy, if done properly will allow you to discharge all your debts and retain the all the things that you own. Although Chapter 7 bankruptcy is also known as liquidation bankruptcy, bankruptcy law allows us to exempt or protect certain assets. Since all non-exempt assets are to be liquidated in a Chapter 7 it is critical to have proper legal advice to using Maryland exemptions so that you will not lose any property.

In the State of Maryland, a debtor has up to $12,000 in total personal property exemptions. There are several categories of property that are included within the $12,000 of property that we can exempt:
First, you have $5,000 in personal property exemptions that you can use to protect any personal property or effects.
Second, $1000 is allocated to household goods and furnishings. This means you can use this $1000 to protect furniture and other items in your home.
Third you have a $6,000 wild card exemption that allows you to protect either real or personal property.

The result is that if you are filing without your spouse you can protect any personal property as long as the value of that property is not more than $11,000. If a married couple is filing together in Maryland for Chapter 7 bankruptcy, they can protect up to $2,000 in household goods and $22,000 in any personal property.

If you do not have equity in your home, car or other financed asset, there is normally little if any risk that it will be liquidated or sold as part of a Chapter 7 bankruptcy. If you do have equity or value over the mortgages or secured loans, we use exemptions to protect the property.

In the State of Maryland married couples are given special protection for assets that were acquired during the marriage. Real estate and personal property that is owned “by the entireties” as a married couple can under proper circumstances be fully protected. So if the proper analysis is done a home with very substantial equity can pass through bankruptcy without being liquidated if it is properly titled and other very important requirements are met. The exceptions to this type of protection are complicated and require proper analyses. At Broumas Law Group our Maryland bankruptcy lawyer can help you determine if your home will be safe when it has substantial equity.

There is also an exemption for owner occupied real estate in Maryland. Under this exemption you can protect $22,975 of equity in your homestead. Married couples cannot double the homestead exemption which protects equity in their home. Debtors can protect up to $22,975 of equity as per the homestead exemption, which was passed in 2010.

There are other property specific exemptions in Maryland that may be available including some life insurance policies, pension plans, tools of the trade and various other less commonly used exemptions. Our Maryland bankruptcy attorney at Broumas Law Group can make sure you get every single exemption you are allowed when filing for any kind of bankruptcy.

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