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*sb0939*
SENATE BILL 939
D3, N1 (6lr2785)
ENROLLED BILL
— Judicial Proceedings/Economic Matters —
Introduced by Senator Henson
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
President.
CHAPTER ______
AN ACT concerning 1
Bankruptcy Proceedings – Exemptions From Execution – Residential Real 2
Property 3
FOR the purpose of providing that the exemption for exempting certain providing that the 4
exemption for owner–occupied residential real property from execution on a 5
judgment in certain amounts and subject to certain adjustments in a bankruptcy 6
proceeding includes certain real property held in a revocable trust; altering the 7
amount of the exemption for owner–occupied residential real property in a bankruptcy 8
proceeding includes certain real property held in a revocable trust; altering the 9
amount of the exemption for owner –occupied residential real property in a 10
bankruptcy proceeding; and generally relating to debtor exemptions and bankruptcy 11
proceedings. 12
BY repealing and reenacting, without amendments, 13
Article – Estates and Trusts 14
2 SENATE BILL 939
Section 14.5–103(a), (v), and (w) 1
Annotated Code of Maryland 2
(2022 Replacement Volume and 2025 Supplement) 3
BY repealing and reenacting, with amendments, 4
Article – Courts and Judicial Proceedings 5
Section 11–504(a) and (f) (b) (f) 6
Annotated Code of Maryland 7
(2020 Replacement Volume and 2025 Supplement) 8
BY repealing and reenacting, without amendments, 9
Article – Courts and Judicial Proceedings 10
Section 11–504(g) 11
Annotated Code of Maryland 12
(2020 Replacement Volume and 2025 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Estates and Trusts 16
14.5–103. 17
(a) In this title the following words have the meanings indicated. 18
(v) “Revocable”, as applied to a trust, means revocable by the settlor without the 19
consent of the trustee or a person holding an adverse interest. 20
(w) (1) “Settlor” means a person, including a testator, that creates or 21
contributes property to a trust. 22
(2) “Settlor” includes a person that, with other settlors, creates or 23
contributes property to a trust in which case each such person is a settlor of the portion of 24
the trust property attributable to the contribution of that person except to the extent 25
another person has the power to revoke or withdraw that portion. 26
Article – Courts and Judicial Proceedings 27
11–504. 28
(a) (1) In this section the following words have the meanings indicated. 29
(2) “Depository institution” means a bank, credit union, trust company, 30
savings bank, or savings and loan association, or any of their affiliates or subsidiaries. 31
(3) “DISABILITY” MEANS A PHYSICAL OR MENTAL IMPAIRMENT THAT 32
RESULTS IN A SUBSTANTIAL IMPEDIMENT TO EMPLOYMENT. 33
SENATE BILL 939 3
(4) (3) “REVOCABLE TRUST ” HAS THE MEANING STAT ED IN § 1
14.5–103 OF THE ESTATES AND TRUSTS ARTICLE. 2
(5) (4) “SETTLOR” HAS THE MEANING STAT ED IN § 14.5–103 OF 3
THE ESTATES AND TRUSTS ARTICLE. 4
[(3)] (6) (5) “Value” means fair market value as of the date on which the 5
execution or other judicial process becomes effective against the property of the debtor, or 6
the date of filing the petition under the federal Bankruptcy Code. 7
(f) (1) (i) In addition to the exemptions provided in subsection (b) of this 8
section, and in other statutes of this State, in any proceeding under Title 11 of the United 9
States Code, entitled “Bankruptcy”, any individual debtor domiciled in this State may 10
exempt the debtor’s aggregate interest in: 11
1. Personal property, up to $5,000; and 12
2. Subject to subparagraph (ii) of this paragraph: 13
A. Owner–occupied residential real property, including a 14
condominium unit [or], a manufactured home that has been converted to real property in 15
accordance with § 8B–201 of the Real Property Article, OR RESIDENTIAL REAL PROPERTY 16
OF A SETTLOR THAT IS HELD IN A REVOCABLE TRUST; or 17
B. A cooperative housing corporation that owns property that 18
the debtor occupies as a residence. 19
(ii) [The] SUBJECT TO SUBPARAGRA PH (III) OF THIS 20
PARAGRAPH AND PARAGRAPH (2) OF THIS SUBSECTION, THE exemption allowed under 21
subparagraph (i)2 of this paragraph may not exceed [the amount under 11 U.S.C. § 22
522(d)(1), adjusted in accordance with 11 U.S.C. § 104, subject to the provisions of 23
paragraphs (2) and (3) of this subsection] $125,000 FOR AN INDIVIDUAL. 24
(III) IF MULTIPLE INDIVIDUA LS IN THE SAME BANKR UPTCY 25
PROCEEDING CLAIM THE EXEMPTION UNDER SUBP ARAGRAPH (I)2 OF THIS 26
PARAGRAPH FOR THE SA ME PROPERTY, THE TOTAL EXEMPTION AMOUNT MAY NOT 27
EXCEED $125,000. 28
(2) [An individual may not claim the exemption under paragraph (1)(i)2 of 29
this subsection on a particular property if: 30
(i) The individual has claimed successfully the exemption on the 31
property within 8 years prior to the filing of the bankruptcy proceeding in which the 32
exemption under this subsection is claimed; or 33
4 SENATE BILL 939
(ii) The individual’s spouse, child, child’s spouse, parent, sibling, 1
grandparent, or grandchild has claimed successfully the exemption on the property within 2
8 years prior to the filing of the bankruptcy proceeding in which the exemption under this 3
subsection is claimed. 4
(3) The exemption under paragraph (1)(i)2 of this subsection may not be 5
claimed by both a husband and wife in the same bankruptcy proceeding] FOR FISCAL YEAR 6
2028 AND EACH FISCAL YEAR THEREAFTER, THE EXEMPTION AMOUNT S SPECIFIED 7
IN PARAGRAPH (1)(II) AND (III) OF THIS SUBSECTION SHALL BE: 8
(I) ADJUSTED B Y ANY CHANGE IN THE CALENDAR YEAR 9
PRECEDING THE FISCAL YEAR IN THE CONSUMER PRICE INDEX (ALL URBAN 10
CONSUMERS – UNITED STATES CITY AVERAGE – ALL ITEMS), AS PUBLISHED BY THE 11
U.S. BUREAU OF LABOR STATISTICS; AND 12
(II) ROUNDED TO THE NEAREST $25. 13
(b) (1) The following items are exempt from execution on a judgment: 14
[(1)] (I) Wearing apparel, books, tools, instruments, or appliances, in an 15
amount not to exceed $5,000 in value necessary for the practice of any trade or profession 16
except those kept for sale, lease, or barter. 17
[(2)] (II) Except as provided in subsection (i) of this section, money 18
payable in the event of sickness, accident, injury, or death of any person, including 19
compensation for loss of future earnings. This exemption includes but is not limited to 20
money payable on account of judgments, arbitrations, compromises, insurance, benefits, 21
compensation, and relief. Disability income benefits are not exempt if the judgment is for 22
necessities contracted for after the disability is incurred. 23
[(3)] (III) Professionally prescribed health aids for the debtor or any 24
dependent of the debtor. 25
[(4)] (IV) The debtor’s interest, not to exceed $1,000 in value, in household 26
furnishings, household goods, wearing apparel, appliances, books, animals kept a s pets, 27
and other items that are held primarily for the personal, family, or household use of the 28
debtor or any dependent of the debtor. 29
[(5)] (V) Subject to subsection (c)(3) of this section, up to $500 in a deposit 30
account or other account of the debt or held by a depository institution, without election of 31
the debtor. 32
[(6)] (VI) Cash or property of any kind equivalent in value to $6,000 is 33
exempt, if within 30 days from the date of the attachment or the levy by the sheriff, the 34
SENATE BILL 939 5
debtor elects to exem pt cash or selected items of property in an amount not to exceed a 1
cumulative value of $6,000, except that the cumulative value of cash and property 2
exempted under this item and item [(5)] (V) of this [subsection] PARAGRAPH may not 3
exceed $6,000. 4
[(7)] (VII) Money payable or paid in accordance with an agreement or court 5
order for child support. 6
[(8)] (VIII) Money payable or paid in accordance with an agreement or court 7
order for alimony to the same extent that wages are exempt from attachment under § 8
15–601.1(b)(1)(i) of the Commercial Law Article. 9
[(9)] (IX) The debtor’s beneficial interest in any trust property that is 10
immune from the claims of the debtor’s creditors under § 14.5–511 of the Estates and Trusts 11
Article. 12
[(10)] (X) With respect to claims by a separate creditor of a husband or 13
wife, trust property that is immune from the claims of the separate creditors of the husband 14
or wife under § 14.5–511 of the Estates and Trusts Article. 15
(XI) OWNER–OCCUPIED RESIDENTIAL REAL PROPERTY , 16
INCLUDING A CONDOMINIUM UNIT, A COOPERATIVE HOUSING CORPORATION THAT 17
OWNS PROPERTY THAT THE DEBTOR OCCUPIES AS A RESIDENCE, A MANUFACTURED 18
HOME, OR RESIDENTIAL REAL PROPERTY OF A SETTLO R THAT IS HELD IN A 19
REVOCABLE TRUST, IN THE FOLLOWING AMOUNTS: 20
1. EXCEPT AS PROVIDED IN ITEM 2 OF THIS ITEM , 21
$150,000 FOR AN INDIVIDUAL; AND 22
2. $300,000 FOR AN INDIVIDUAL WH O IS AT LEAST 65 23
YEARS OLD. 24
(2) (I) BEGINNING OCTOBER 1, 2027, AND EVERY 3 YEARS 25
THEREAFTER, THE EXEMPTION AMOUNTS SPECIFIED UNDER PARAGRAPH (1)(XI) OF 26
THIS SUBSECTION SHALL BE: 27
1. ADJUSTED BY ANY CHANG E IN THE CALENDAR YE AR 28
PRECEDING THE FISCAL YEAR IN THE CONSUMER PRICE INDEX (ALL URBAN 29
CONSUMERS – UNITED STATES CITY AVERAGE – ALL ITEMS), AS PUBLISHED BY THE 30
U.S. BUREAU OF LABOR STATISTICS; AND 31
2. ROUNDED TO THE NEAREST $25. 32
(II) ADJUSTMENTS MADE UNDE R THIS PARAGRAPH MAY NOT 33
APPLY TO BANKRUPTCY PROCEEDINGS FILED BEFORE OCTOBER 1, 2027. 34
6 SENATE BILL 939
(f) (1) (i) In addition to the exemptions provided in subsection (b) of this 1
section, and in other statutes of this State, in any proceeding under Title 11 of the United 2
States Code, entitled “Bankruptcy”, any individual debtor domiciled in this State may 3
exempt the debtor’s aggregate interest in: 4
1. Personal property, up to $5,000; and 5
2. Subject to subparagraph (ii) of this paragraph: 6
A. Owner–occupied residential real property, including a 7
condominium unit [or], a manufactured home that has been converted to real property in 8
accordance with § 8B –201 of the Real Property Article , OR RESIDENTIAL REAL 9
PROPERTY OF A SETTLOR THAT IS HELD IN A REVOCABLE TRUST; or 10
B. A cooperative housing corporation that owns property that 11
the debtor occupies as a residence. 12
(ii) [The] SUBJECT TO SUBPARAGRA PH (III) OF THIS 13
PARAGRAPH AND PARAGRAPH (2) OF THIS SUBSECTION, THE exemption allowed under 14
subparagraph (i)2 of this paragraph may not exceed [the amount under 11 U.S.C. § 15
522(d)(1), adjusted in accordance with 11 U.S.C. § 104, subj ect to the provisions of 16
paragraphs (2) and (3) of this subsection]: 17
1. $300,000 FOR AN INDIVIDUAL WH O IS AT LEAST 60 18
YEARS OLD AND: 19
A. IS A VETERAN, AS DEFINED IN § 9–901 OF THE STATE 20
GOVERNMENT ARTICLE; OR 21
B. HAS A DISABILITY CERT IFIED BY A LICENSED 22
PHYSICIAN THAT CAN R EASONABLY BE EXPECTE D TO LAST FOR A CONT INUOUS 23
PERIOD OF AT LEAST 12 MONTHS AFTER THE DAT E ON WHICH THE PROCE EDING 24
BEGINS; AND 25
2. $150,000 FOR ANY OTHER INDIVIDUAL. 26
(III) IF MULTIPLE INDIVIDUA LS IN THE SAME BANKR UPTCY 27
PROCEEDING CLAIM THE EXEMPTION UNDER SUBP ARAGRAPH (I)2 OF THIS 28
PARAGRAPH FOR THE SAME PROPERTY, THE TOTAL EXEMPTION AMOUNT MAY NOT 29
EXCEED $300,000. 30
(2) [An individual may not claim the exemption under paragraph (1)(i)2 of 31
this subsection on a particular property if: 32
SENATE BILL 939 7
(i) The individual has claimed successfully the exemption on the 1
property within 8 years prior to the filing of the bankruptcy proceeding in which the 2
exemption under this subsection is claimed; or 3
(ii) The individual’s spouse, chil d, child’s spouse, parent, sibling, 4
grandparent, or grandchild has claimed successfully the exemption on the property within 5
8 years prior to the filing of the bankruptcy proceeding in which the exemption under this 6
subsection is claimed. 7
(3) The exemption under paragraph (1)(i)2 of this subsection may not be 8
claimed by both a husband and wife in the same bankruptcy proceeding ] FOR FISCAL 9
YEAR 2028 AND EACH FISCAL YEAR THEREAFTER, THE EXEMPTION AMOUNT S 10
SPECIFIED IN PARAGRAPH (1)(II) OF THIS SUBSECTION SHALL BE: 11
(I) ADJUSTED BY ANY CHANG E IN THE CALENDAR YE AR 12
PRECEDING THE FISCAL YEAR IN THE CONSUMER PRICE INDEX (ALL URBAN 13
CONSUMERS – UNITED STATES CITY AVERAGE – ALL ITEMS), AS PUBLISHED BY THE 14
U.S. BUREAU OF LABOR STATISTICS; AND 15
(II) ROUNDED TO THE NEAREST $25. 16
(g) In any bankruptcy proceeding, a debtor is not entitled to the federal 17
exemptions provided by § 522(d) of the federal Bankruptcy Code. 18
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 19
apply only prospectivel y and may not be applied or interpreted to have any effect on or 20
application to any bankruptcy proceeding filed before the effective date of this Act. 21
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect June 22
1, 2026. 23
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.