Serving Maryland and District of Columbia
Personal and Business Bankruptcy: Chapter 7, Chapter 11, Chapter 13
Other than their home, the piece of property people are most concerned about protecting in a Chapter 7 bankruptcy case is their primary car or truck. Having a reliable form of transportation is a necessity in the modern age and if filing for bankruptcy means their main car or truck must be sold to pay creditors, then many people do not want to file for bankruptcy. Some people think twice about bankruptcy if it will mean losing their second vehicle or their fishing boat or their big-screen TV or whatever big-ticket item is near and dear to them.
To protect personal and real property from being seized by the bankruptcy trustee and sold to pay creditors, the debtor must apply one of several exemptions available. Unlike some states, Maryland does not have a specific exemption for vehicles. Nor does Maryland bankruptcy law permit debtors to choose federal exemptions, like the federal vehicle exemption. But Maryland does have an exemption that provides a little more flexibility and that can be applied to vehicles and other items. This is referred to as the Wild Card Exemption.
Maryland’s wild card exemption allows bankruptcy 7 debtors to exempt up to $6,000 in cash or other property AND up to $5,000 in personal property. Either or both parts of this exemption can be applied toward vehicles or any other personal property, including boats and big-screen TV’s, for a total of $11,000. Couples may double both for a total of $22,000, though to apply that amount to a single item the item must be jointly owned. For example, if a couple is going to apply both of their exemptions toward the family’s Cadillac Escalade, the Escalade must be titled in both spouses’ names.
How Does the Maryland Wild Card Exemption Work?
Chapter 7 bankruptcy forms include a section for listing the property you want to exempt from being sold to pay your creditors. On the forms you’ll list the property and which exemption you want to apply and how much of that exemption you want to apply. For example, you may want to apply $4,000 of your wild card cash/property exemption toward your home if the homestead exemption isn’t sufficient alone and the remainder of that exemption ($2,000) plus the $5,000 personal property wild card exemption toward your primary vehicle.
When deciding how to use your wild card exemption, there are several things to keep in mind:
Deciding how to apply your exemptions, especially your wild card exemption, can be confusing and complicated. Many people think they have a good plan and still end up getting important items of property taken for bankruptcy auction. An experienced Maryland bankruptcy attorney can help you avoid such a situation and help you identify the best alternatives for getting the most of your exemptions in a Chapter 7 bankruptcy.
Maryland bankruptcy attorney John Burns and his firm can assist in identifying your best options for wild card and other exemptions along with all aspects of bankruptcy in Maryland. Call our office at 301-441-8780 to schedule an appointment or e-mail us at firstname.lastname@example.org.