Courts - Exemptions From Execution on Judgments - Residential Real Property
Summary
HB1098 revises Maryland’s exemption rules for residential real property in both judgment-execution and bankruptcy contexts. The bill expands the protected property category to include owner-occupied residential real property held in a revocable trust, along with condominiums, certain cooperative housing interests, and manufactured homes converted to real property. It also raises the exemption amount for owner-occupied residential real property in bankruptcy and in court-ordered execution contexts, replacing the prior federal-reference-based cap with fixed Maryland amounts.
Under the bill, the exemption for owner-occupied residential real property is set at up to $75,000 for an individual in the judgment-execution provision, with future inflation adjustments beginning in 2027. In bankruptcy proceedings, the bill sets a higher homestead exemption of $150,000 for most individuals and $300,000 for individuals age 60 or older who are veterans or who have a qualifying disability, with inflation adjustments beginning in fiscal year 2028. The bill also clarifies that multiple claimants in the same bankruptcy case may not exceed a combined $300,000 exemption for the same property. The act applies prospectively only to bankruptcy proceedings filed on or after its effective date of June 1, 2026.
Impact
HB1098 amends provisions in the Courts and Judicial Proceedings Article governing exemptions from execution on judgments and bankruptcy exemptions, and it cross-references the Estates and Trusts Article definition of revocable trust. It changes Maryland law by creating specific state exemption amounts for homestead-type residential property, rather than relying on the federal bankruptcy exemption amount under 11 U.S.C. § 522(d)(1), and by expressly protecting qualifying residential property held in revocable trusts. The bill affects debtors, creditors, bankruptcy trustees, and courts by increasing the amount of home equity that may be shielded from collection and by broadening the types of residential ownership arrangements that qualify for protection.
Sentiment
The bill appears to have been broadly favorable in the House, where it passed third reading unanimously, 126-0. The committee report was favorable with amendments, suggesting support for the policy goal of expanding homeowner protections while making technical or policy refinements. No committee transcript was provided, but the voting record indicates little to no recorded opposition in the House.
Contention
The main policy issues reflected in the text are the size of the exemption increase, the creation of a higher exemption tier for older veterans and individuals with disabilities, and the inclusion of property held in revocable trusts. These changes likely matter most to debtors seeking to protect home equity and to creditors concerned about reduced recovery in collection and bankruptcy cases. The bill also replaces a prior structure tied to federal exemption amounts with fixed Maryland amounts and future CPI adjustments, which may have been a point of legislative negotiation, though no transcript is available to show specific objections.