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Bankruptcy: A Guide to Protecting Your Home

Facing financial difficulties can be overwhelming, and in some cases, filing for bankruptcy becomes a necessary step to regain control of your financial situation. If you’re a Maryland resident struggling to keep your home while contemplating bankruptcy, it’s crucial to understand the intricacies of the process. This article aims to provide a comprehensive guide on how to navigate bankruptcy while safeguarding your home in the state of Maryland.

Understanding Bankruptcy Options:

Maryland residents typically file for either Chapter 7 or Chapter 13 bankruptcy. Each chapter serves different purposes and has unique implications for homeowners.

Chapter 7 Bankruptcy:

In a Chapter 7 bankruptcy, non-exempt assets may be liquidated to pay off creditors.

Maryland has specific exemptions that protect certain assets, including a homestead exemption for your primary residence.

As of my last knowledge update in January 2022, Maryland’s homestead exemption is $25,150 per individual and $50,300 per married couple. Consult with a legal professional to verify the current exemption limits.

Chapter 13 Bankruptcy:

Chapter 13 allows individuals with a regular income to reorganize their debts and create a manageable repayment plan.

Homeowners can use Chapter 13 to catch up on mortgage arrears and prevent foreclosure.

It provides a structured plan to repay debts over three to five years.

Protecting Your Home in Bankruptcy:

Homestead Exemption:

Maryland’s homestead exemption allows you to protect a certain amount of equity in your primary residence.

Equity is the value of your home minus any outstanding mortgage debt.

It’s essential to accurately assess the equity in your home and determine if it falls within the exemption limits.

Chapter 13 Repayment Plan:

If you’re behind on mortgage payments, Chapter 13 can be a valuable tool to catch up and avoid foreclosure.

The repayment plan considers your regular mortgage payments and a portion of your arrears, making it easier to manage your financial obligations.

Consulting with a Bankruptcy Attorney

Seeking professional advice is crucial when contemplating bankruptcy.

An experienced bankruptcy attorney can help you understand the legal nuances, exemptions, and the best course of action to protect your home.


Filing for bankruptcy in Maryland doesn’t necessarily mean losing your home. With careful consideration, strategic planning, and professional guidance, you can navigate the bankruptcy process while safeguarding your most significant asset. It’s essential to stay informed about the state’s exemptions, consult with a bankruptcy attorney, and take proactive steps to secure a more stable financial future.

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