Maryland 2022 Regular Session

Maryland House Bill HB322 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
44 [Brackets] indicate matter deleted from existing law.
5- Underlining indicates amendments to bill.
6- Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7-amendment.
85 *hb0322*
96
107 HOUSE BILL 322
118 D3 2lr1392
129 HB 772/21 – JUD
1310 By: Delegate Lopez
1411 Introduced and read first time: January 19, 2022
1512 Assigned to: Judiciary
16-Committee Report: Favorable
17-House action: Adopted
18-Read second time: March 1, 2022
1913
20-CHAPTER ______
14+A BILL ENTITLED
2115
2216 AN ACT concerning 1
2317
2418 Courts – Judgments – Exemptions From Execution 2
2519
2620 FOR the purpose of exempting up to a certain amount of money in certain accounts of a 3
2721 judgment debtor from execution on the judgment without an election by the debtor 4
2822 to exempt the money; establishing a certain limit on the cumulative value of property 5
2923 and cash that may be exempted; requiring a writ of garnishment issued for certain 6
3024 accounts to instruct the garnishee that it is to garnish only a certain amount; and 7
3125 generally relating to exemptions from execution of a judgment. 8
3226
3327 BY repealing and reenacting, with amendments, 9
3428 Article – Courts and Judicial Proceedings 10
3529 Section 11–504 11
3630 Annotated Code of Maryland 12
3731 (2020 Replacement Volume and 2021 Supplement) 13
3832
3933 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
4034 That the Laws of Maryland read as follows: 15
4135
4236 Article – Courts and Judicial Proceedings 16
4337
4438 11–504. 17
4539
4640 (a) In this section, “value” means fair market value as of the date upon which the 18
4741 execution or other judicial process becomes effective against the property of the debtor, or 19
48-the date of filing the petition under the federal Bankruptcy Code. 20 2 HOUSE BILL 322
42+the date of filing the petition under the federal Bankruptcy Code. 20
43+
44+ (b) The following items are exempt from execution on a judgment: 21
45+
46+ (1) Wearing apparel, books, tools, instruments, or appliances, in an amount 22
47+not to exceed $5,000 in value necessary for the practice of any trade or profession except 23
48+those kept for sale, lease, or barter. 24 2 HOUSE BILL 322
4949
5050
5151
52- (b) The following items are exempt from execution on a judgment: 1
52+ (2) Except as provided in subsection (i) of this section, money payable in 1
53+the event of sickness, accident, injury, or death of any person, including compensation for 2
54+loss of future earnings. This exemption includes but is not limited to money payable on 3
55+account of judgments, arbitrations, compromises, insurance, benefits, compensation, and 4
56+relief. Disability income benefits are not exempt if the judgment is for necessities contracted 5
57+for after the disability is incurred. 6
5358
54- (1) Wearing apparel, books, tools, instruments, or appliances, in an amount 2
55-not to exceed $5,000 in value necessary for the practice of any trade or profession except 3
56-those kept for sale, lease, or barter. 4
59+ (3) Professionally prescribed health aids for the debtor or any dependent of 7
60+the debtor. 8
5761
58- (2) Except as provided in subsection (i) of this section, money payable in 5
59-the event of sickness, accident, injury, or death of any person, including compensation for 6
60-loss of future earnings. This exemption includes but is not limited to money payable on 7
61-account of judgments, arbitrations, compromises, insurance, benefits, compensation, and 8
62-relief. Disability income benefits are not exempt if the judgment is for necessities contracted 9
63-for after the disability is incurred. 10
62+ (4) The debtor’s interest, not to exceed $1,000 in value, in household 9
63+furnishings, household goods, wearing apparel, appliances, books, animals kept as pets, 10
64+and other items that are held primarily for the personal, family, or household use of the 11
65+debtor or any dependent of the debtor. 12
6466
65- (3) Professionally prescribed health aids for the debtor or any dependent of 11
66-the debtor. 12
67+ (5) UP TO $500 IN A DEPOSIT ACCOUNT OR OTHER ACCOUNT OF THE 13
68+DEBTOR HELD BY A BAN K, CREDIT UNION , TRUST COMPANY , SAVINGS BANK , OR 14
69+SAVINGS AND LOAN ASS OCIATION OR ANY OF T HEIR AFFILIATES OR S UBSIDIARIES, 15
70+WITHOUT ELECTION OF THE DEBTOR. 16
6771
68- (4) The debtor’s interest, not to exceed $1,000 in value, in household 13
69-furnishings, household goods, wearing apparel, appliances, books, animals kept as pets, 14
70-and other items that are held primarily for the personal, family, or household use of the 15
71-debtor or any dependent of the debtor. 16
72+ [(5)] (6) Cash or property of any kind equivalent in value to $6,000 is 17
73+exempt, if within 30 days from the date of the attachment or the levy by the sheriff, the 18
74+debtor elects to exempt cash or selected items of property in an amount not to exceed a 19
75+cumulative value of $6,000, EXCEPT THAT THE C UMULATIVE VALUE OF C ASH AND 20
76+PROPERTY EXEMPTED UN DER THIS ITEM AND ITEM (5) OF THIS SUBSECTION M AY 21
77+NOT EXCEED $6,000. 22
7278
73- (5) UP TO $500 IN A DEPOSIT ACCOUNT OR OTHER ACCOUNT OF THE 17
74-DEBTOR HELD BY A BAN K, CREDIT UNION , TRUST COMPANY , SAVINGS BANK , OR 18
75-SAVINGS AND LOAN ASS OCIATION OR ANY OF T HEIR AFFILIATES OR S UBSIDIARIES, 19
76-WITHOUT ELECTION OF THE DEBTOR. 20
79+ [(6)] (7) Money payable or paid in accordance with an agreement or court 23
80+order for child support. 24
7781
78- [(5)] (6) Cash or property of any kind equivalent in value to $6,000 is 21
79-exempt, if within 30 days from the date of the attachment or the levy by the sheriff, the 22
80-debtor elects to exempt cash or selected items of property in an amount not to exceed a 23
81-cumulative value of $6,000, EXCEPT THAT THE CUMU LATIVE VALUE OF CASH AND 24
82-PROPERTY EXEMPTED UN DER THIS ITEM AND ITEM (5) OF THIS SUBSECTION M AY 25
83-NOT EXCEED $6,000. 26
82+ [(7)] (8) Money payable or paid in accordance with an agreement or court 25
83+order for alimony to the same extent that wages are exempt from attachment under § 26
84+15–601.1(b)(1)(ii) or (2)(i) of the Commercial Law Article. 27
8485
85- [(6)] (7) Money payable or paid in accordance with an agreement or court 27
86-order for child support. 28
86+ [(8)] (9) The debtor’s beneficial interest in any trust property that is 28
87+immune from the claims of the debtor’s creditors under § 14.5–511 of the Estates and Trusts 29
88+Article. 30
8789
88- [(7)] (8) Money payable or paid in accordance with an agreement or court 29
89-order for alimony to the same extent that wages are exempt from attachment under § 30
90-15–601.1(b)(1)(ii) or (2)(i) of the Commercial Law Article. 31
90+ [(9)] (10) With respect to claims by a separate creditor of a husband or 31
91+wife, trust property that is immune from the claims of the separate creditors of the husband 32
92+or wife under § 14.5–511 of the Estates and Trusts Article. 33
9193
92- [(8)] (9) The debtor’s beneficial interest in any trust property that is 32
93-immune from the claims of the debtor’s creditors under § 14.5–511 of the Estates and Trusts 33
94-Article. 34
95-
96- [(9)] (10) With respect to claims by a separate creditor of a husband or 35 HOUSE BILL 322 3
97-
98-
99-wife, trust property that is immune from the claims of the separate creditors of the husband 1
100-or wife under § 14.5–511 of the Estates and Trusts Article. 2
101-
102- (c) (1) (I) In order to determine whether the property listed in subsection 3
103-(b)(4) and [(5)] (6) of this section is subject to execution, the sheriff shall appraise the 4
104-property at the time of levy. The sheriff shall return the appraisal with the writ. 5
105-
106- [(2)] (II) An appraisal made by the sheriff under this [subsection] 6
107-PARAGRAPH is subject to review by the court on motion of the debtor. 7
108-
109- [(3)] (III) Procedures will be as prescribed by rules issued by the Court of 8
110-Appeals. 9
111-
112- (2) A WRIT OF GARNISHMENT ISSUED FOR A DEPOSIT ACCOUNT OR 10
113-OTHER ACCOUNT HELD B Y A BANK, CREDIT UNION, TRUST COMPANY , SAVINGS BANK, 11
114-OR SAVINGS AND LOAN ASSOCIATION OR ANY O F THEIR AFFILIATES O R 12
115-SUBSIDIARIES SHALL I NSTRUCT THE GARNISHE E THAT, SUBJECT TO ADDITION AL 13
116-EXEMPTIONS, IT IS TO GARNISH ONLY THE AMOUNT EXCEEDING THE AMOUNT 14
117-EXEMPTED WITHOUT ELE CTION OF THE DEBTOR . 15
118-
119- (d) The debtor may not waive, by cognovit note or otherwise, the provisions of 16
120-subsections (b) and (h) of this section. 17
121-
122- (e) The exemptions in this section do not apply to wage attachments. 18
123-
124- (f) (1) (i) In addition to the exemptions provided in subsection (b) of this 19
125-section, and in other statutes of this State, in any proceeding under Title 11 of the United 20
126-States Code, entitled “Bankruptcy”, any individual debtor domiciled in this State may 21
127-exempt the debtor’s aggregate interest in: 22
128-
129- 1. Personal property, up to $5,000; and 23
130-
131- 2. Subject to subparagraph (ii) of this paragraph: 24
132-
133- A. Owner–occupied residential real property, including a 25
134-condominium unit or a manufactured home that has been converted to real property in 26
135-accordance with § 8B–201 of the Real Property Article; or 27
136-
137- B. A cooperative housing corporation that owns property that 28
138-the debtor occupies as a residence. 29
139-
140- (ii) The exemption allowed under subparagraph (i)2 of this 30
141-paragraph may not exceed the amount under 11 U.S.C. § 522(d)(1), adjusted in accordance 31
142-with 11 U.S.C. § 104, subject to the provisions of paragraphs (2) and (3) of this subsection. 32
143-
144- (2) An individual may not claim the exemption under paragraph (1)(i)2 of 33 4 HOUSE BILL 322
145-
146-
147-this subsection on a particular property if: 1
148-
149- (i) The individual has claimed successfully the exemption on the 2
150-property within 8 years prior to the filing of the bankruptcy proceeding in which the 3
151-exemption under this subsection is claimed; or 4
152-
153- (ii) The individual’s spouse, child, child’s spouse, parent, sibling, 5
154-grandparent, or grandchild has claimed successfully the exemption on the property within 6
155-8 years prior to the filing of the bankruptcy proceeding in which the exemption under this 7
156-subsection is claimed. 8
157-
158- (3) The exemption under paragraph (1)(i)2 of this subsection may not be 9
159-claimed by both a husband and wife in the same bankruptcy proceeding. 10
160-
161- (g) In any bankruptcy proceeding, a debtor is not entitled to the federal 11
162-exemptions provided by § 522(d) of the federal Bankruptcy Code. 12
163-
164- (h) (1) In addition to the exemptions provided in subsections (b) and (f) of this 13
165-section and any other provisions of law, any money or other assets payable to a participant 14
166-or beneficiary from, or any interest of any participant or beneficiary in, a retirement plan 15
167-qualified under § 401(a), § 403(a), § 403(b), § 408, § 408A, § 414(d), or § 414(e) of the United 16
168-States Internal Revenue Code of 1986, as amended, or § 409 (as in effect prior to January 17
169-1984) of the United States Internal Revenue Code of 1954, as amended, shall be exempt 18
170-from any and all claims of the creditors of the beneficiary or participant, other than claims 19
171-by the Maryland Department of Health. 20
172-
173- (2) Paragraph (1) of this subsection does not apply to: 21
174-
175- (i) An alternate payee under a qualified domestic relations order, as 22
176-defined in § 414(p) of the United States Internal Revenue Code of 1986, as amended; 23
177-
178- (ii) A retirement plan, qualified under § 401(a) of the United States 24
179-Internal Revenue Code of 1986, as amended, as a creditor of an individual retirement 25
180-account qualified under § 408 of the United States Internal Revenue Code of 1986, as 26
181-amended; or 27
182-
183- (iii) The assets of a bankruptcy case filed before January 1, 1988. 28
184-
185- (3) The interest of an alternate payee in a plan described under paragraph 29
186-(1) of this subsection shall be exempt from any and all claims of any creditor of the alternate 30
187-payee, except claims by the Maryland Department of Health. 31
188-
189- (4) If a contribution to a retirement plan described under paragraph (1) of 32
190-this subsection exceeds the amount deductible or, in the case of contribution under § 408A 33
191-of the Internal Revenue Code, the maximum contribution allowed under the applicable 34
192-provisions of the United States Internal Revenue Code of 1986, as amended, the portion of 35
193-that contribution that exceeds the amount deductible or, in the case of contribution under 36 HOUSE BILL 322 5
194-
195-
196-§ 408A of the Internal Revenue Code, the maximum contribution allowed, and any accrued 1
197-earnings on such a portion, are not exempt under paragraph (1) of this subsection. 2
198-
199- (i) (1) In this subsection, “net recovery” means the sum of money to be 3
200-distributed to the debtor after deduction of attorney’s fees, expenses, medical bills, and 4
201-satisfaction of any liens or subrogation claims arising out of the claims for personal injury, 5
202-including those arising under: 6
203-
204- (i) The Medicare Secondary Payer Act, 42 U.S.C. § 1395y; 7
205-
206- (ii) A program of the Maryland Department of Health for which a 8
207-right of subrogation exists under §§ 15–120 and 15–121.1 of the Health – General Article; 9
208-
209- (iii) An employee benefit plan subject to the federal Employee 10
210-Retirement Income Security Act of 1974; or 11
211-
212- (iv) A health insurance contract. 12
213-
214- (2) Twenty–five percent of the net recovery by the debtor on a claim for 13
215-personal injury is subject to execution on a judgment for a child support arrearage. 14
216-
217- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to 15
218-apply only prospectively and may not be applied or interpreted to have any effect on or 16
219-application to any writ of garnishment or writ of execution issued before the effective date 17
220-of this Act. 18
221-
222- SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 19
223-October 1, 2022. 20
94+ (c) (1) (I) In order to determine whether the property listed in subsection 34
95+(b)(4) and [(5)] (6) of this section is subject to execution, the sheriff shall appraise the 35
96+property at the time of levy. The sheriff shall return the appraisal with the writ. 36 HOUSE BILL 322 3
22497
22598
22699
100+ [(2)] (II) An appraisal made by the sheriff under this [subsection] 1
101+PARAGRAPH is subject to review by the court on motion of the debtor. 2
227102
228-Approved:
229-________________________________________________________________________________
230- Governor.
231-________________________________________________________________________________
232- Speaker of the House of Delegates.
233-________________________________________________________________________________
234- President of the Senate.
103+ [(3)] (III) Procedures will be as prescribed by rules issued by the Court of 3
104+Appeals. 4
105+
106+ (2) A WRIT OF GARNISHMENT ISSUED FOR A DEPOSIT ACCOUNT OR 5
107+OTHER ACCOUNT HELD B Y A BANK, CREDIT UNION, TRUST COMPANY , SAVINGS BANK, 6
108+OR SAVINGS AND LOAN ASSOCIATION OR ANY O F THEIR AFFILIATES O R 7
109+SUBSIDIARIES SHALL I NSTRUCT THE GARNISHE E THAT, SUBJECT TO ADDITIONA L 8
110+EXEMPTIONS, IT IS TO GARNISH ONLY THE AMOUNT EXCEEDING THE AMOUNT 9
111+EXEMPTED WITHOUT ELE CTION OF THE DEBTOR . 10
112+
113+ (d) The debtor may not waive, by cognovit note or otherwise, the provisions of 11
114+subsections (b) and (h) of this section. 12
115+
116+ (e) The exemptions in this section do not apply to wage attachments. 13
117+
118+ (f) (1) (i) In addition to the exemptions provided in subsection (b) of this 14
119+section, and in other statutes of this State, in any proceeding under Title 11 of the United 15
120+States Code, entitled “Bankruptcy”, any individual debtor domiciled in this State may 16
121+exempt the debtor’s aggregate interest in: 17
122+
123+ 1. Personal property, up to $5,000; and 18
124+
125+ 2. Subject to subparagraph (ii) of this paragraph: 19
126+
127+ A. Owner–occupied residential real property, including a 20
128+condominium unit or a manufactured home that has been converted to real property in 21
129+accordance with § 8B–201 of the Real Property Article; or 22
130+
131+ B. A cooperative housing corporation that owns property that 23
132+the debtor occupies as a residence. 24
133+
134+ (ii) The exemption allowed under subparagraph (i)2 of this 25
135+paragraph may not exceed the amount under 11 U.S.C. § 522(d)(1), adjusted in accordance 26
136+with 11 U.S.C. § 104, subject to the provisions of paragraphs (2) and (3) of this subsection. 27
137+
138+ (2) An individual may not claim the exemption under paragraph (1)(i)2 of 28
139+this subsection on a particular property if: 29
140+
141+ (i) The individual has claimed successfully the exemption on the 30
142+property within 8 years prior to the filing of the bankruptcy proceeding in which the 31
143+exemption under this subsection is claimed; or 32
144+ 4 HOUSE BILL 322
145+
146+
147+ (ii) The individual’s spouse, child, child’s spouse, parent, sibling, 1
148+grandparent, or grandchild has claimed successfully the exemption on the property within 2
149+8 years prior to the filing of the bankruptcy proceeding in which the exemption under this 3
150+subsection is claimed. 4
151+
152+ (3) The exemption under paragraph (1)(i)2 of this subsection may not be 5
153+claimed by both a husband and wife in the same bankruptcy proceeding. 6
154+
155+ (g) In any bankruptcy proceeding, a debtor is not entitled to the federal 7
156+exemptions provided by § 522(d) of the federal Bankruptcy Code. 8
157+
158+ (h) (1) In addition to the exemptions provided in subsections (b) and (f) of this 9
159+section and any other provisions of law, any money or other assets payable to a participant 10
160+or beneficiary from, or any interest of any participant or beneficiary in, a retirement plan 11
161+qualified under § 401(a), § 403(a), § 403(b), § 408, § 408A, § 414(d), or § 414(e) of the United 12
162+States Internal Revenue Code of 1986, as amended, or § 409 (as in effect prior to January 13
163+1984) of the United States Internal Revenue Code of 1954, as amended, shall be exempt 14
164+from any and all claims of the creditors of the beneficiary or participant, other than claims 15
165+by the Maryland Department of Health. 16
166+
167+ (2) Paragraph (1) of this subsection does not apply to: 17
168+
169+ (i) An alternate payee under a qualified domestic relations order, as 18
170+defined in § 414(p) of the United States Internal Revenue Code of 1986, as amended; 19
171+
172+ (ii) A retirement plan, qualified under § 401(a) of the United States 20
173+Internal Revenue Code of 1986, as amended, as a creditor of an individual retirement 21
174+account qualified under § 408 of the United States Internal Revenue Code of 1986, as 22
175+amended; or 23
176+
177+ (iii) The assets of a bankruptcy case filed before January 1, 1988. 24
178+
179+ (3) The interest of an alternate payee in a plan described under paragraph 25
180+(1) of this subsection shall be exempt from any and all claims of any creditor of the alternate 26
181+payee, except claims by the Maryland Department of Health. 27
182+
183+ (4) If a contribution to a retirement plan described under paragraph (1) of 28
184+this subsection exceeds the amount deductible or, in the case of contribution under § 408A 29
185+of the Internal Revenue Code, the maximum contribution allowed under the applicable 30
186+provisions of the United States Internal Revenue Code of 1986, as amended, the portion of 31
187+that contribution that exceeds the amount deductible or, in the case of contribution under 32
188+§ 408A of the Internal Revenue Code, the maximum contribution allowed, and any accrued 33
189+earnings on such a portion, are not exempt under paragraph (1) of this subsection. 34
190+
191+ (i) (1) In this subsection, “net recovery” means the sum of money to be 35
192+distributed to the debtor after deduction of attorney’s fees, expenses, medical bills, and 36
193+satisfaction of any liens or subrogation claims arising out of the claims for personal injury, 37 HOUSE BILL 322 5
194+
195+
196+including those arising under: 1
197+
198+ (i) The Medicare Secondary Payer Act, 42 U.S.C. § 1395y; 2
199+
200+ (ii) A program of the Maryland Department of Health for which a 3
201+right of subrogation exists under §§ 15–120 and 15–121.1 of the Health – General Article; 4
202+
203+ (iii) An employee benefit plan subject to the federal Employee 5
204+Retirement Income Security Act of 1974; or 6
205+
206+ (iv) A health insurance contract. 7
207+
208+ (2) Twenty–five percent of the net recovery by the debtor on a claim for 8
209+personal injury is subject to execution on a judgment for a child support arrearage. 9
210+
211+ SECTION 2. AND BE IT FURT HER ENACTED, That this Act shall be construed to 10
212+apply only prospectively and may not be applied or interpreted to have any effect on or 11
213+application to any writ of garnishment or writ of execution issued before the effective date 12
214+of this Act. 13
215+
216+ SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 14
217+October 1, 2022. 15
218+