Courts - Exemption From Judgment - Alterations and Additions
HB1520 revises Maryland’s exemption-from-judgment laws, which determine what property and funds a debtor can keep from creditors when a judgment is enforced or when a bankruptcy case is filed. The bill increases several existing exemption amounts and adds new exempt categories. It raises the value of household goods and similar personal property that may be protected from $1,000 to $5,000, creates a separate $3,000 exemption for firearms, and expands the motor-vehicle exemption from $10,000 to $25,000 for certain elderly or disabled debtors. It also adds a new exemption for certain federal payments under sections 24 or 32 of the Internal Revenue Code.
The bill makes more substantial changes in bankruptcy-related exemptions. It replaces the prior home-equity exemption formula tied to the federal Bankruptcy Code with a fixed $300,000 exemption for owner-occupied residential property, including condominiums, mobile homes, manufactured homes converted to real property, and cooperative housing interests. That home exemption is increased to $600,000 if the owner or a dependent is elderly or disabled. The bill also clarifies and expands definitions, including “elderly” as age 60 or older, and defines disability for purposes of the statute. It preserves existing protections for retirement plans, trust interests, child support, alimony, and certain personal injury recoveries, while maintaining the rule that Maryland debtors may not claim the federal bankruptcy exemptions under 11 U.S.C. § 522(d).
HB1520 amends § 11-504 of the Courts and Judicial Proceedings Article, changing the scope and dollar amounts of property exempt from execution, attachment, garnishment, and bankruptcy administration. The practical effect is to shield more personal property, a larger share of home equity, and additional assets for elderly, disabled, and disabled veteran debtors, while also adding explicit protection for certain federal benefit payments and firearms. Creditors’ ability to reach these assets is correspondingly reduced, and sheriffs, courts, and depository institutions would apply the revised exemption rules in judgment enforcement and garnishment proceedings beginning October 1, 2026.
The bill appears to have broad support in the House, passing third reading unanimously with 132 yeas and no nays. The committee report was favorable with amendments, suggesting general agreement with the policy goal of expanding debtor protections while refining the bill’s language. No committee transcript was provided, but the voting history indicates little visible opposition in the House.
The main policy tension in HB1520 is between debtor relief and creditor recovery. Supporters are likely to favor the larger exemptions for household goods, vehicles, and home equity, especially for elderly, disabled, and disabled veteran debtors, as a way to protect basic living stability and housing security. Potential concerns would come from creditors and collection interests, who may view the higher exemption caps—particularly the $300,000 and $600,000 home exemptions—as significantly limiting collection remedies. The bill also introduces a firearms exemption and expands protected federal payments, which could draw separate scrutiny, though the available voting record does not show organized opposition.