What Assets Will I Lose by Filing Chapter 7 Bankruptcy?

September 26, 2025

Filing for Chapter 7 bankruptcy comes with a trade-off. You are able to have your unsecured debts discharged at the conclusion of the bankruptcy process. In exchange for this fresh financial start, you are subject to a personal liquidation. You must surrender certain ‘non-exempt’ property to the bankruptcy trustee, who would then sell it and use the proceeds to pay your creditors. It is not automatic that you lose all of your personal property in a Chapter 7 bankruptcy.

Is My Personal Property Subject to Surrender in Chapter 7 Bankruptcy?

The assumption is that you cannot retain all of your personal property if it is not ‘exempt.’ The surrender of your personal property is a principle of fairness that applies to a bankruptcy case. Creditors are losing out on a significant amount of money when you cannot pay your debts. The law imposes the obligation to liquidate your personal property, so creditors can receive something for the debt. Bankruptcy is the last chance they would have to be paid anything.

Maryland Law Allows for Certain Property to Be Exempt

Since the law aims to balance the interests of debtors and creditors with an eye towards protecting you, it does not expect that you must give up every single piece of property that you own in a bankruptcy proceeding. Each state provides for its own exemptions that allow you to retain certain property in bankruptcy. Maryland law is no different.

According to Maryland law, you have the following “exemptions” in a bankruptcy case:

• There is a $27,900 “wildcard exemption” that applies to all of your personal property, including your real estate. There is no Homestead exemption under Maryland law, as there is in other states.
• You may keep up to $1,000 of household goods, including clothing and personal items.
• Up to 75% of your unearned wages are exempt from Chapter 7 bankruptcy.
• Your car is included in the wild card exemption, as there is no specific protection for a motor vehicle.
• You may keep up to $5,000 in tools of your trade.
• ERISA-qualified retirement accounts are fully exempt.
• IRAs and Roth IRAs are exempt up to $1.5 million.
• Your public benefits, such as Social Security, are exempt.
• Life insurance proceeds are also exempt from Chapter 7 bankruptcy.

The wildcard exemption is raised periodically in Maryland, although there is no statutory requirement for it to be indexed to inflation. This figure is critically important in determining how much property you can keep, since there is no Homestead or motor vehicle exemption. You can expect to be able to retain some but not all of your property in a Chapter 7 bankruptcy.

You Must Disclose All of Your Personal Property to the Court

Although you may not want to surrender your personal property as part of the bankruptcy process, it is a requirement under the law. Accordingly, you must fully disclose your personal property on your bankruptcy filing. The knowing and willful failure to do so is a violation of the law, and it can result in bankruptcy fraud charges. It is essential that you work with an experienced Chapter 7 bankruptcy lawyer when you are compiling your filing to the court. They will know what you must disclose and what property is exempt. Otherwise, you are taking a potential risk that not only will your bankruptcy filing be unsuccessful, but you could also face legal consequences.

Contact the Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton if You Are Considering Filing for Chapter 7 Bankruptcy

Speak to the Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton to learn more about both how the process will work and what property you can retain. To schedule a free consultation, submit our online contact form or call us today at 800-547-4LAW (4529).

We have offices in Baltimore and Owings Mills, allowing us to represent clients in Maryland, including those in Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Prince George’s County, Queen Anne’s County, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.