WES MOORE, Governor Ch. 720
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Chapter 720
(Senate Bill 106)
AN ACT concerning
Courts – Judgments – Exemptions From Execution
FOR the purpose of exempting up to a certain amount of money in certain accounts of a
judgment debtor from execution on the judgment without an election by the debtor
to exempt the money; establishing procedures a depository institution is required to
follow on receipt of a writ of garnishment or other levy or attachment under certain
circumstances; establishing a certain limit on the cumulative value of property and
cash that may be exempted; requiring a writ of garnishment issued for certain
accounts to instruct the garnishee that it is to garnish only a certain amount; and
generally relating to exemptions from execution of a judgment.
BY repealing and reenacting, with amendments,
Article – Courts and Judicial Proceedings
Section 11–504
Annotated Code of Maryland
(2020 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Courts and Judicial Proceedings
11–504.
(a) In this section, “value” means fair market value as of the date upon which the
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS
INDICATED.
(2) “DEPOSITORY INSTITUTIO N” MEANS A BANK , CREDIT UNION ,
TRUST COMPANY , SAVINGS BANK, OR SAVINGS AND LOAN ASSOCIATION , OR ANY OF
THEIR AFFILIATES OR SUBSIDIARIES.
(3) “VALUE” MEANS FAIR MARKET VA LUE AS OF THE DATE O N WHICH
THE execution or other judicial process becomes effective against the property of the debtor,
or the date of filing the petition under the federal Bankruptcy Code.
(b) The following items are exempt from execution on a judgment:
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(1) Wearing apparel, books, tools, instruments, or appliances, in an amount
not to exceed $5,000 in value necessary for the practice of any trade or profession except
those kept for sale, lease, or barter.
(2) Except as provided in subsection (i) of this section, money payable in
the event of sickness, accident, injury, or death of any person, including compensation for
loss of future earnings. This exemption includes but is not limited to money payable on
account of judgments, arbitrations, compromises, insurance, benefits, compensation, and
relief. Disability income benefits are not exempt if the judgment is for necessities contracted
for after the disability is incurred.
(3) Professionally prescribed health aids for the debtor or any dependent of
the debtor.
(4) The debtor’s interest, not to exceed $1,000 in value, in household
furnishings, household goods, wearing apparel, appliances, books, animals kept as pets,
and other items that are held primarily for the personal, family, or household use of the
debtor or any dependent of the debtor.
(5) UP SUBJECT TO SUBSECTION (C)(3) OF THIS SECTION, UP TO $500
IN A DEPOSIT ACCOUNT OR OTHER ACCOUNT OF THE DEBTOR HELD B Y A BANK,
CREDIT UNION , TRUST COMPANY , SAVINGS BANK , OR SAVINGS AND LOAN
ASSOCIATION OR ANY O F THEIR AFFILIATES O R SUBSIDIARIES DEPOSITORY
INSTITUTION, WITHOUT ELECTION OF THE DEBTOR.
[(5)] (6) Cash or property of any kind equivalent in value to $6,000 is
exempt, if within 30 days from the date of the attachment or the levy by the sheriff, the
debtor elects to exempt cash or selected items of property in an amount not to exceed a
cumulative value of $6,000, EXCEPT THAT THE CUMU LATIVE VALUE OF CASH AND
PROPERTY EXEMPTED UN DER THIS ITEM AND IT EM (5) OF THIS SUBSECTION M AY
NOT EXCEED $6,000.
[(6)] (7) Money payable or paid in accordance with an agreement or court
order for child support.
[(7)] (8) Money payable or paid in accordance with an agreement or court
order for alimony to the same extent that wages are exempt from attachment under [§
15–601.1(b)(1)(ii) or (2)(i)] § 15–601.1(B)(1)(I) of the Commercial Law Article.
[(8)] (9) The debtor’s beneficial interest in any trust property that is
immune from the claims of the debtor’s creditors under § 14.5–511 of the Estates and Trusts
Article.
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[(9)] (10) With respect to claims by a separate creditor of a husband or
wife, trust property that is immune from the claims of the separate creditors of the husband
or wife under § 14.5–511 of the Estates and Trusts Article.
(c) (1) (I) In order to determine whether the property listed in subsection
(b)(4) and [(5)] (6) of this section is subject to execution, the sheriff shall appraise the
property at the time of levy. The sheriff shall return the appraisal with the writ.
[(2)] (II) An appraisal made by the sheriff under this [subsection]
PARAGRAPH is subject to review by the court on motion of the debtor.
[(3)] (III) Procedures will be as prescribed by rules issued by the Court of
Appeals.
(2) (I) A WRIT OF GARNISHMENT ISSUED FOR A DEPOSIT ACCOUNT
OR OTHER ACCOUNT HEL D BY A BANK, CREDIT UNION , TRUST COMPANY , SAVINGS
BANK, OR SAVINGS AND LOAN ASSOCIATION OR ANY O F THEIR AFFILIATES OR
SUBSIDIARIES DEPOSITORY INSTITUTI ON SHALL INSTRUCT THE G ARNISHEE THAT ,
SUBJECT TO ADDITIONA L EXEMPTIONS , IT IS TO GARNISH ONL Y THE AMOUNT
EXCEEDING THE AMOUNT EXEMPTED WITHOUT ELE CTION OF THE DEBTOR .
(II) A DEPOSITORY INSTITUTI ON MAY NOT BE LIABLE TO THE
JUDGMENT CREDITOR FO R ACTIONS TAKEN IN G OOD FAITH RELIANCE O N THE
INSTRUCTIONS IN THE WRIT OF GARNISHMENT REQUIRED UNDER THIS PARAGRAPH .
(3) (I) A DEPOSITORY INSTITUTI ON SHALL, ON RECEIPT OF A WRIT
OF GARNISHMENT OR OT HER LEVY OR ATTACHME NT, ANSWER THE WRIT OF
GARNISHMENT OR OTHER LEVY OR ATTACHMENT A ND, IF THE DEBTOR MAINTA INS
ANY DEPOSIT ACCOUNTS WITH THE DEPOSITORY INSTITUTION, STATE:
1. THAT THE TOTAL AMOUNT DOES NOT EXCEED $500;
OR
2. THE AMOUNT OF FUNDS I N EXCESS OF $500 THAT HAS
BEEN HELD PENDING FU RTHER ORDER OF COURT .
(II) FOR ANY FUNDS IN EXCE SS OF $500, THE DEPOSITORY
INSTITUTION SHALL FO LLOW ALL OTHER CUSTO MARY PROCEDURE S FOR HANDLING
A WRIT OF GARNISHMEN T OR OTHER LEVY OR A TTACHMENT , INCLUDING FREEZING
OF FUNDS.
(III) 1. IF A DEBTOR HOLDS AN INTEREST IN MULTIPLE
DEPOSIT ACCOUNTS AT A SINGLE DEPOSITORY INSTITUTION, THE DEPOSITORY Ch. 720 2023 LAWS OF MARYLAND
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INSTITUTION MAY DETE RMINE HOW AND TO W HICH ACCOUNT OR ACCO UNTS THE
$500 EXEMPTION SHOULD BE APPLIED.
2. THIS SUBPARAGRAPH DOE S NOT CREATE A CAUSE OF
ACTION AGAINST A DEP OSITORY INSTITUTION THAT COMPLIES WITH A WRIT OF
GARNISHMENT OR OTHER LEVY OR ATTACHMENT .
(IV) THE EXEMPTION UNDER SUBSECTION (B)(5) OF THIS
SECTION:
1. APPLIES SEPARATELY TO EACH DEPOSITORY
INSTITUTION AND TO E ACH WRIT OF GARNISHM ENT DIRECTED TO A DE POSITORY
INSTITUTION; AND
2. DOES NOT PRECLUDE OR REDUCE A DEBTOR ’S
RIGHTS TO ANY OTHER EXEMPTION PROVIDED B Y STATE OR FEDERAL LAW .
(d) The debtor may not waive, by cognovit note or otherwise, the provisions of
subsections (b) and (h) of this section.
(e) The exemptions in this section do not apply to wage attachments.
(f) (1) (i) In addition to the exemptions provided in subsection (b) of this
section, and in other statutes of this State, in any proceeding under Title 11 of the United
States Code, entitled “Bankruptcy”, any individual debtor domiciled in this State may
exempt the debtor’s aggregate interest in:
1. Personal property, up to $5,000; and
2. Subject to subparagraph (ii) of this paragraph:
A. Owner–occupied residential real property, including a
condominium unit or a manufactured home that has been converted to real property in
accordance with § 8B–201 of the Real Property Article; or
B. A cooperative housing corporation that owns property that
the debtor occupies as a residence.
(ii) The exemption allowed under subparagraph (i)2 of this
paragraph may not exceed the amount under 11 U.S.C. § 522(d)(1), adjusted in accordance
with 11 U.S.C. § 104, subject to the provisions of paragraphs (2) and (3) of this subsection.
(2) An individual may not claim the exemption under paragraph (1)(i)2 of
this subsection on a particular property if:
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(i) The individual has claimed successfully the exemption on the
property within 8 years prior to the filing of the bankruptcy proceeding in which the
exemption under this subsection is claimed; or
(ii) The individual’s spouse, child, child’s spouse, parent, sibling,
grandparent, or grandchild has claimed successfully the exemption on the property within
8 years prior to the filing of the bankruptcy proceeding in which the exemption under this
subsection is claimed.
(3) The exemption under paragraph (1)(i)2 of this subsection may not be
claimed by both a husband and wife in the same bankruptcy proceeding.
(g) In any bankruptcy proceeding, a debtor is not entitled to the federal
exemptions provided by § 522(d) of the federal Bankruptcy Code.
(h) (1) In addition to the exemptions provided in subsections (b) and (f) of this
section and any other provisions of law, any money or other assets payable to a participant
or beneficiary from, or any interest of any participant or beneficiary in, a retirement plan
qualified under § 401(a), § 403(a), § 403(b), § 408, § 408A, § 414(d), or § 414(e) of the United
States Internal Revenue Code of 1986, as amended, or § 409 (as in effect prior to January
1984) of the United States Internal Revenue Code of 1954, as amended, shall be exempt
from any and all claims of the creditors of the beneficiary or participant, other than claims
by the Maryland Department of Health.
(2) Paragraph (1) of this subsection does not apply to:
(i) An alternate payee under a qualified domestic relations order, as
defined in § 414(p) of the United States Internal Revenue Code of 1986, as amended;
(ii) A retirement plan, qualified under § 401(a) of the United States
Internal Revenue Code of 1986, as amended, as a creditor of an individual retirement
account qualified under § 408 of the United States Internal Revenue Code of 1986, as
amended; or
(iii) The assets of a bankruptcy case filed before January 1, 1988.
(3) The interest of an alternate payee in a plan described under paragraph
(1) of this subsection shall be exempt from any and all claims of any creditor of the alternate
payee, except claims by the Maryland Department of Health.
(4) If a contribution to a retirement plan described under paragraph (1) of
this subsection exceeds the amount deductible or, in the case of contribution under § 408A
of the Internal Revenue Code, the maximum contribution allowed under the applicable
provisions of the United States Internal Revenue Code of 1986, as amended, the portion of
that contribution that exceeds the amount deductible or, in the case of contribution under Ch. 720 2023 LAWS OF MARYLAND
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§ 408A of the Internal Revenue Code, the maximum contribution allowed, and any accrued
earnings on such a portion, are not exempt under paragraph (1) of this subsection.
(i) (1) In this subsection, “net recovery” means the sum of money to be
distributed to the debtor after deduction of attorney’s fees, expenses, medical bills, and
satisfaction of any liens or subrogation claims arising out of the claims for personal injury,
including those arising under:
(i) The Medicare Secondary Payer Act, 42 U.S.C. § 1395y;
(ii) A program of the Maryland Department of Health for which a
right of subrogation exists under §§ 15–120 and 15–121.1 of the Health – General Article;
(iii) An employee benefit plan subject to the federal Employee
Retirement Income Security Act of 1974; or
(iv) A health insurance contract.
(2) Twenty–five percent of the net recovery by the debtor on a claim for
personal injury is subject to execution on a judgment for a child support arrearage.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to
apply only prospectively and may not be applied or interpreted to have any effect on or
application to any writ of garnishment or writ of execution issued before the effective date
of this Act.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2023.
Approved by the Governor, May 16, 2023.