2026-09-12 · Maryland · Legislation

What happened. Maryland increased the amount of home equity a debtor can protect in bankruptcy and, for the first time, extended that protection to a residence held in a revocable trust. Senate Bill 939 was signed on 12 May 2026 as Chapter 400 of the Acts of 2026 and took effect 1 June 2026 — so it has been operating for three months.¹

It is not a community-association bill and it is not in the Real Property Article. It amends Courts and Judicial Proceedings § 11-504 and Estates and Trusts § 14.5-103. It reaches Maryland associations anyway, because every assessment-collection decision is ultimately a judgment about recoverable equity.

What the statute says, and what we could not verify

The legislature's synopsis is precise about direction and silent about amount:

“Providing that the exemption for owner-occupied residential real property in a bankruptcy proceeding includes certain real property held in a revocable trust; and altering the amount of the exemption for owner-occupied residential real property in a bankruptcy proceeding.”¹

No dollar figure appears on the bill page. Practitioner analyses report the new exemption as $125,000, replacing a figure tied to the federal amount as periodically adjusted — roughly $31,575 — and report a combined cap of $125,000 where multiple individuals claim the exemption in the same property in the same case.²

We checked the codified text on the legislature's own site and it had not yet been updated when we looked: it still cross-references 11 U.S.C. § 522(d)(1) as adjusted, and still carries the older “husband and wife” formulation of the single-claim rule.³ The pre-amendment federal reference is consistent with the reported $31,575 starting point, which corroborates the direction of travel. Treat the $125,000 figure as practitioner-sourced until the codified text catches up.

1. Senate Bill 939, Maryland General Assembly 2026 Regular Session — bill record and synopsis, Chapter 400, approved 12 May 2026, effective 1 June 2026; Senate 44-0, House 128-7, Senate concurrence 45-0. No dollar amount appears on the page ↩
2. Friedman Vartolo, Maryland expands residential bankruptcy exemptions through SB 939 — practitioner analysis reporting the $125,000 exemption, the prior federal-linked figure, and the combined multi-claimant cap ↩
3. Maryland Code, Courts and Judicial Proceedings § 11-504 — codified text as served by the General Assembly on 12 September 2026, still referencing 11 U.S.C. § 522(d)(1) as adjusted and the older single-claim formulation ↩
4. Office of the Attorney General of Maryland, Final Order against a community-association property manager, 3 December 2025 — $1.3 million in civil penalties and the statutory late-charge limit of the greater of $15 or 10 percent after 15 days ↩
5. Lorraine Mirabella, The Baltimore Sun, 26 July 2026 — investigation into Maryland HOA and condominium foreclosures (allegations contested by the association) ↩
6. House Bill 523 (2026), Real Property – Residential Foreclosures – Commencement Restrictions — the ten-year limit; passed House 110-23, favourable Senate committee report 13 April 2026, died on a special-order motion at sine die ↩