Maryland 2022 Regular Session

Maryland House Bill HB322 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4		[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.
8	5		hb0322
9	6
10	7		HOUSE BILL 322
11	8		D3 2lr1392
12	9		HB 772/21 – JUD
13	10		By: Delegate Lopez
14	11		Introduced and read first time: January 19, 2022
15	12		Assigned to: Judiciary
16		-	Committee Report: Favorable
17		-	House action: Adopted
18		-	Read second time: March 1, 2022
19	13
20		-	~~CHAPTER ______~~
	14	+	A BILL ENTITLED
21	15
22	16		AN ACT concerning 1
23	17
24	18		Courts – Judgments – Exemptions From Execution 2
25	19
26	20		FOR the purpose of exempting up to a certain amount of money in certain accounts of a 3
27	21		judgment debtor from execution on the judgment without an election by the debtor 4
28	22		to exempt the money; establishing a certain limit on the cumulative value of property 5
29	23		and cash that may be exempted; requiring a writ of garnishment issued for certain 6
30	24		accounts to instruct the garnishee that it is to garnish only a certain amount; and 7
31	25		generally relating to exemptions from execution of a judgment. 8
32	26
33	27		BY repealing and reenacting, with amendments, 9
34	28		Article – Courts and Judicial Proceedings 10
35	29		Section 11–504 11
36	30		Annotated Code of Maryland 12
37	31		(2020 Replacement Volume and 2021 Supplement) 13
38	32
39	33		SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
40	34		That the Laws of Maryland read as follows: 15
41	35
42	36		Article – Courts and Judicial Proceedings 16
43	37
44	38		11–504. 17
45	39
46	40		(a) In this section, “value” means fair market value as of the date upon which the 18
47	41		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
49	49
50	50
51	51
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
53	58
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
57	61
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
64	66
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
67	71
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
72	78
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
77	81
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
84	85
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
87	89
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
91	93
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
224	97
225	98
226	99
	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
227	102
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	+