Website Exempt Under Tools of the Trade Exemption

Website Exempt Under Tools of the Trade Exemption

| Mar 2, 2015 | Bankruptcy |

When we think of “tools of the trade” we think of actual tools, such as hammers, nails, saws, etc. Under Maryland law a person is entitled to exempt from execution upon a judgment: “Wearing apparel, books, tools, instruments, or appliances, in an amount not to exceed $5,000 in value necessary for the practice of any trade or profession except those kept for sale, lease, or barter.” Md. Court & Jud. Pro. Section 11-504 (b)(1).

In a recent decision, In re MacMillan, 2015 WL 148339 (Bankr. D. Kan. 1/19/15), the court allowed the debtor to exempt his website and the digital images on the website. The debtor in this case was a professional photographer who sold his digitally enhanced landscape photographs on his web site. The bankruptcy trustee objected to the exemption claiming that the tools of exemption exception did not apply to the website or the digital images. The court overruled the trustee’s objection and noted that state’s law which exempted “other tangible means of production” could be interpreted to include the images and the web site.

It is unclear whether under the Maryland statute a debtor could exempt his web site. If not, then I suggest the Maryland legislature this session take up the matter and amend it to include web sites, the content in the web site and its digital images.

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