People worry if they’re going to keep their property after filing for Chapter 7 bankruptcy. Maryland bankruptcy exemptions include properties and personal assets that cannot be seized or sold by creditors. There are also federal exemptions that are listed under the Bankruptcy Code and protected by federal law. It’s important to know about bankruptcy exemptions and the rules and regulations that govern their use.
You must claim an exempt property when you file for bankruptcy or risk not being protected. Not every filer is automatically given protection by the court. However, nearly every filer is eligible to claim an exemption after making the request.
Know who qualifies
Only individuals are allowed to claim exemptions, not companies. A business’s property and its contents are given directly to the creditors or sold to repay them. Married couples can exempt jointly owned property as well as individual assets that they own.
Types of property
Basic types of property are protected from seizure, such as homes, vehicles, furniture and retirement accounts. Intangible items like life insurance, child support and court settlements are also protected from being reclaimed through bankruptcy. Maryland includes wildcard exemptions that allow you to protect any property of your choice depending on its value.
The importance of exemptions to filers
Exemptions allow people to keep their most valued belongings while paying off their debts. Fewer people would file for bankruptcy if they were forced to give up more of their personal assets. Bankruptcy laws vary by state, and the types of exemptions are modified every three years, so it’s important to keep up to date on the different rules regarding exemptions that every filer should know.