Maryland Bankruptcy Guide

Complete guide to filing bankruptcy in Maryland, including current median income requirements, Maryland's homestead exemption up to $31,175, choice between state and federal exemptions, bankruptcy court information, and how to find qualified bankruptcy attorneys throughout Maryland.

Maryland Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in Maryland, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$75,024	$6,252
2 people	$94,114	$7,843
3 people	$112,125	$9,344
4 people	$132,798	$11,067
5 people	$141,798	$11,817
6 people	$150,798	$12,567

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program. Maryland has high median incomes due to proximity to Washington, D.C.

Calculate Your Maryland Eligibility

Maryland Bankruptcy Exemptions

Maryland allows bankruptcy filers to choose between Maryland state exemptions and the federal bankruptcy exemptions. This choice can significantly impact which assets you can protect, so it's important to carefully compare both sets of exemptions with a Maryland bankruptcy attorney.

Maryland Homestead Exemption

Up to $31,175 under Maryland law.

Maryland's state homestead exemption protects up to $31,175 of equity in your primary residence. This exemption applies to real property including houses, condominiums, mobile homes, and co-ops that serve as your principal residence.

The property must be your principal residence at the time of filing bankruptcy. Unlike some states, Maryland's homestead exemption does not increase for married couples filing jointly—it remains $31,175 total for the household.

Federal Exemption Alternative: Maryland filers can instead choose the federal homestead exemption of $27,900 ($55,800 for married couples filing jointly). For single filers, Maryland state exemption is slightly higher. For married couples, the federal exemption is significantly better.

Maryland Vehicle Exemption

Up to $5,000.

Maryland allows you to protect up to $5,000 of equity in one motor vehicle under state exemptions. This is a generous vehicle exemption that protects most financed vehicles.

Federal Exemption Alternative: The federal vehicle exemption is $4,450, which is slightly lower than Maryland's $5,000 state exemption. For vehicle protection, Maryland state exemptions are modestly better.

Maryland State Exemptions

Maryland bankruptcy exemptions include:

• Homestead: $31,175 (no increase for married couples)
• Vehicle: $5,000
• Household Goods and Furnishings: $1,000
• Clothing and Personal Items: $1,000
• Books: $500
• Cash: $6,000 (this is Maryland's wildcard exemption)
• Tools of Trade: $5,000
• Lost Future Earnings: Payments for lost future earnings needed for support
• Wages: Earned but unpaid wages (75% of disposable wages or 30 times federal minimum wage, whichever is greater)

Federal Exemptions (Alternative Choice)

Maryland filers may choose federal exemptions instead:

• Homestead: $27,900 ($55,800 for married couples)
• Vehicle: $4,450
• Household Goods: $700 per item, up to $14,875 total
• Jewelry: $1,875
• Tools of Trade: $2,800
• Wildcard: $1,475 general + up to $13,950 of unused homestead (total $15,425)

Which Exemptions Should You Choose?

Choose Maryland state exemptions if:

• You're single and have moderate home equity (Maryland $31,175 vs federal $27,900)
• You have significant vehicle equity (Maryland $5,000 vs federal $4,450)
• You have valuable tools of trade (Maryland $5,000 vs federal $2,800)
• You want to protect $6,000 cash in the bank (Maryland's cash exemption)

Choose federal exemptions if:

• You're married filing jointly and have home equity (federal $55,800 vs Maryland $31,175)
• You have little or no home equity and want the larger federal wildcard ($15,425)
• You have significant household goods (federal $14,875 vs Maryland $1,000)
• You have valuable jewelry (federal $1,875 vs no Maryland jewelry exemption)

Other Protected Assets

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits under federal law
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits, public assistance, TANF
• Life Insurance: Life insurance proceeds if beneficiary is not the estate; group life insurance policy
• Health Aids: All medically prescribed health aids
• Education Savings: Maryland 529 education savings plan (Maryland College Investment Plan)
• Personal Injury Awards: Personal injury awards to the extent reasonably necessary for support
• Wrongful Death Awards: Wrongful death recoveries

Filing Bankruptcy in Maryland

Chapter 7 Bankruptcy in Maryland

Chapter 7 bankruptcy is commonly filed throughout Maryland. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in Maryland, you must pass the means test by having income below the Maryland median (which is quite high due to the Washington, D.C. area) or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Maryland's choice between state and federal exemptions gives you flexibility to maximize asset protection based on your specific situation. Work with a Maryland bankruptcy attorney to determine which exemption set protects your assets better.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in Maryland

Chapter 13 bankruptcy allows Maryland residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is especially useful in Maryland if your income is too high to qualify for Chapter 7 (Maryland's high median incomes make this common), if you have non-exempt assets you want to protect, or if you have priority debts like recent taxes or past-due child support. Your monthly payment is based on your disposable income after allowable living expenses.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Court in Maryland

Maryland has one federal bankruptcy court district:

District of Maryland

Main Courthouses: Greenbelt, Baltimore

The U.S. Bankruptcy Court for the District of Maryland covers the entire state. The court has two main locations:

Greenbelt Division (Southern Maryland): Serves the Washington, D.C. suburbs including Montgomery County, Prince George's County, and southern Maryland. This courthouse in Greenbelt handles cases from the densely populated areas near D.C. including Silver Spring, Bethesda, Rockville, Gaithersburg, Bowie, and College Park. This division handles a high volume of cases due to the population concentration.

Baltimore Division (Central and Northern Maryland): Serves Baltimore City, Baltimore County, and northern Maryland including Annapolis, Frederick, Hagerstown, and the Eastern Shore. This courthouse in Baltimore handles cases from central Maryland, the greater Baltimore area, and the Chesapeake Bay region.

You must file in the district where you have lived for the greater part of the 180 days before filing. Since Maryland has only one district, all Maryland residents file in the District of Maryland, but your case will be assigned to either the Greenbelt or Baltimore location based on your county of residence.

Maryland Residency Requirements

To use Maryland bankruptcy exemptions (either state or federal), you must have been domiciled (legally residing) in Maryland for at least 730 days (2 years) before filing. If you've lived in Maryland for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

Maryland allows you to choose between state and federal exemptions once you meet the residency requirement. This choice is made at the time of filing and cannot be changed later, so careful analysis with an attorney is important.

Find a Maryland Bankruptcy Attorney

Most Maryland bankruptcy attorneys offer free initial consultations. Given the complexity of bankruptcy law and Maryland's choice between state and federal exemptions, consulting with an experienced Maryland bankruptcy attorney is highly recommended.

What a Maryland Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Compare Maryland state vs. federal exemptions to maximize asset protection
• Calculate whether you qualify for Chapter 7 using the Maryland means test
• Navigate Maryland-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in Maryland

Chapter 7 bankruptcy attorney fees in Maryland vary by location:

• Montgomery County, Prince George's County (DC suburbs): $1,400 to $2,200 plus $338 filing fee
• Baltimore City and Baltimore County: $1,200 to $1,800 plus $338 filing fee
• Annapolis, Howard County: $1,300 to $1,900 plus $338 filing fee
• Frederick, Hagerstown: $1,100 to $1,600 plus $338 filing fee
• Eastern Shore, Southern Maryland: $1,000 to $1,500 plus $338 filing fee

Chapter 13 attorney fees typically range from $3,500 to $5,000 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront.

Maryland attorney fees tend to be higher, particularly in the Washington, D.C. suburbs, due to the high cost of living. Many Maryland attorneys offer payment plans for Chapter 7 to make bankruptcy more accessible.

Maryland-Specific Bankruptcy FAQs

Can I keep my house in Maryland bankruptcy?

It depends on your equity and marital status. If you're single with up to $31,175 equity (using Maryland state exemptions) or $27,900 (federal), your home is protected. If you're married filing jointly, the federal exemption of $55,800 is significantly better than Maryland's $31,175 (which doesn't double for married couples). If your equity exceeds your applicable exemption, you may need to file Chapter 13 to keep your home.

Can I keep my car in Maryland bankruptcy?

Yes, in most cases. Maryland allows you to exempt up to $5,000 of equity in one motor vehicle under state exemptions, or $4,450 under federal exemptions. Most Maryland residents with car loans have equity below these amounts and can keep their vehicles by continuing to make payments through a reaffirmation agreement.

Should I choose state or federal exemptions in Maryland?

It depends on your situation. Married couples filing jointly almost always benefit from federal exemptions ($55,800 homestead vs Maryland's $31,175). Single filers with moderate home equity benefit from Maryland state exemptions ($31,175 vs federal $27,900). Those with little or no home equity may prefer federal exemptions for the larger wildcard ($15,425). An attorney can help you compare both options based on your specific assets.

How does bankruptcy affect federal employees and security clearances in Maryland?

Maryland has a large federal employee population due to proximity to Washington, D.C. Filing bankruptcy does not automatically cause you to lose a security clearance. In fact, addressing financial problems through bankruptcy may be viewed more favorably than having unresolved debts. Security clearance adjudicators consider overall financial responsibility. Consult with your security officer and a Maryland bankruptcy attorney experienced with federal employee issues.

What if I work in D.C. or Virginia but live in Maryland?

If you live in Maryland, you file bankruptcy in Maryland regardless of where you work. Many Maryland residents commute to Washington, D.C. or Northern Virginia for work. Your work location doesn't affect which state's exemptions you use—only your residence matters. You must have lived in Maryland for 730 days to use Maryland exemptions (state or federal).

Can I protect my federal retirement benefits in bankruptcy?

Yes. Federal retirement benefits including FERS, CSRS, TSP, military pensions, and other government retirement accounts are fully protected under federal law. These retirement accounts cannot be taken by creditors in bankruptcy. Maryland has many federal retirees, particularly in the D.C. suburbs and Annapolis area, and these retirement benefits are safe.

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