Consider two people living in the same neighborhood, facing the same financial struggles, with the same amount of equity in their homes.
John's Story: John has $70,000 in equity in his home and has been falling behind on his credit card bills. Believing that bankruptcy was a straightforward process he could handle on his own, John files for Chapter 7 bankruptcy on May 31, 2026, without the help of an attorney. When he appears at the required meeting with the bankruptcy trustee — the court-appointed official who reviews his case — the trustee begins asking detailed questions about his home's value and his remaining mortgage balance. John is caught off guard. He assumed his house was simply off-limits. Instead, he learns that the trustee intends to sell his home and use the proceeds to pay his creditors. The outcome John feared most is now a very real possibility.
Mary's Story: Mary is in nearly identical financial circumstances — the same credit card debt, the same $70,000 in home equity. Rather than filing on her own, Mary takes the time to research her options and consults with an experienced bankruptcy attorney. On May 31, 2026, her attorney calls with important news: although Mary qualifies for Chapter 7, filing that very day would put her home at risk. Mary's first instinct is to simply leave her house out of the bankruptcy. Her attorney gently explains that no asset can simply be excluded from a bankruptcy filing — but that does not automatically mean she will lose her home. In fact, her attorney advises her to wait just one day. By filing on June 1, 2026, Mary will be able to eliminate all of her credit card debt and keep her home.
Same debt. Same equity. One day apart. Completely different results.
The answer lies in a significant change to Maryland law that took effect on June 1, 2026.
When a person files for bankruptcy, the law does not require them to surrender everything they own. Congress recognized that people rebuilding their finances need to retain certain essential assets in order to have a true fresh start. The property a debtor is legally permitted to keep is referred to as "exempt" property.
To illustrate how exemptions work: imagine someone who owes $50,000 in credit card debt but also owns a brand-new truck worth $100,000. It would be fundamentally unfair — both to creditors and to the integrity of the bankruptcy system — if that person could walk away from their debts without contributing any of that asset value toward repayment. In a Chapter 7 case, the trustee would sell the truck and use the proceeds to pay creditors. Exemptions, however, establish a threshold below which assets are protected.
While federal law provides a baseline of protections available to all bankruptcy filers nationwide, each state is permitted to establish its own exemption amounts for residents. Maryland's homestead exemption — the amount of equity in a primary residence that a debtor is allowed to protect — had been set at $31,575 for years, having risen only modestly from $21,500 since 2010. Given the substantial appreciation in Maryland home values over that period, this figure left many homeowners dangerously exposed: either facing the loss of their home in a Chapter 7 case or being forced into a Chapter 13 repayment plan simply to protect equity that had grown beyond the exemption limit.
Beginning June 1, 2026, Maryland's homestead exemption increased to $125,000.
That is why Mary's attorney told her to wait one day. By filing on June 1 rather than May 31, Mary's $70,000 in equity falls comfortably within the new exemption. Her home is fully protected, her credit card debt is discharged, and she walks away with a genuine fresh start.
It is worth noting that not every attorney practicing in Maryland was aware of this legislative change in time to advise their clients accordingly. An attorney who focuses specifically on bankruptcy law would likely have been tracking Senate Bill 939 throughout the legislative process — long before it was signed into law by Governor Wes Moore — and would have been counseling clients with that pending change in mind for months.
This is just one example of how experienced legal counsel can dramatically affect the outcome of a bankruptcy case. The difference between losing a home and keeping it came down not only to a single calendar day, but to having an attorney who knew that day mattered.
The answer is: sooner than you think. Many people wait until a crisis is already upon them — a foreclosure notice has arrived, or months of wages have already been garnished. By that point, options may be limited.
The best time to speak with a bankruptcy attorney is at the first sign of financial strain — when paying everyday bills and keeping up with debt begins to feel unmanageable. Early consultation gives an attorney the time to evaluate all available options, advise on timing, and help you make informed decisions before circumstances narrow your choices.
Bankruptcy law is more nuanced than it appears, and the stakes — including your home — are too high to navigate alone.
If you are struggling with debt, contact the experienced bankruptcy attorneys at Frost Law. Schedule a free consultation by calling 410-497-5947 or filling out our contact form.
This is part 2 of our series Do I Need an Attorney to File for Bankruptcy? Read the previous article.
Consider two people living in the same neighborhood, facing the same financial struggles, with the same amount of equity in their homes.
John's Story: John has $70,000 in equity in his home and has been falling behind on his credit card bills. Believing that bankruptcy was a straightforward process he could handle on his own, John files for Chapter 7 bankruptcy on May 31, 2026, without the help of an attorney. When he appears at the required meeting with the bankruptcy trustee — the court-appointed official who reviews his case — the trustee begins asking detailed questions about his home's value and his remaining mortgage balance. John is caught off guard. He assumed his house was simply off-limits. Instead, he learns that the trustee intends to sell his home and use the proceeds to pay his creditors. The outcome John feared most is now a very real possibility.
Mary's Story: Mary is in nearly identical financial circumstances — the same credit card debt, the same $70,000 in home equity. Rather than filing on her own, Mary takes the time to research her options and consults with an experienced bankruptcy attorney. On May 31, 2026, her attorney calls with important news: although Mary qualifies for Chapter 7, filing that very day would put her home at risk. Mary's first instinct is to simply leave her house out of the bankruptcy. Her attorney gently explains that no asset can simply be excluded from a bankruptcy filing — but that does not automatically mean she will lose her home. In fact, her attorney advises her to wait just one day. By filing on June 1, 2026, Mary will be able to eliminate all of her credit card debt and keep her home.
Same debt. Same equity. One day apart. Completely different results.
The answer lies in a significant change to Maryland law that took effect on June 1, 2026.
When a person files for bankruptcy, the law does not require them to surrender everything they own. Congress recognized that people rebuilding their finances need to retain certain essential assets in order to have a true fresh start. The property a debtor is legally permitted to keep is referred to as "exempt" property.
To illustrate how exemptions work: imagine someone who owes $50,000 in credit card debt but also owns a brand-new truck worth $100,000. It would be fundamentally unfair — both to creditors and to the integrity of the bankruptcy system — if that person could walk away from their debts without contributing any of that asset value toward repayment. In a Chapter 7 case, the trustee would sell the truck and use the proceeds to pay creditors. Exemptions, however, establish a threshold below which assets are protected.
While federal law provides a baseline of protections available to all bankruptcy filers nationwide, each state is permitted to establish its own exemption amounts for residents. Maryland's homestead exemption — the amount of equity in a primary residence that a debtor is allowed to protect — had been set at $31,575 for years, having risen only modestly from $21,500 since 2010. Given the substantial appreciation in Maryland home values over that period, this figure left many homeowners dangerously exposed: either facing the loss of their home in a Chapter 7 case or being forced into a Chapter 13 repayment plan simply to protect equity that had grown beyond the exemption limit.
Beginning June 1, 2026, Maryland's homestead exemption increased to $125,000.
That is why Mary's attorney told her to wait one day. By filing on June 1 rather than May 31, Mary's $70,000 in equity falls comfortably within the new exemption. Her home is fully protected, her credit card debt is discharged, and she walks away with a genuine fresh start.
It is worth noting that not every attorney practicing in Maryland was aware of this legislative change in time to advise their clients accordingly. An attorney who focuses specifically on bankruptcy law would likely have been tracking Senate Bill 939 throughout the legislative process — long before it was signed into law by Governor Wes Moore — and would have been counseling clients with that pending change in mind for months.
This is just one example of how experienced legal counsel can dramatically affect the outcome of a bankruptcy case. The difference between losing a home and keeping it came down not only to a single calendar day, but to having an attorney who knew that day mattered.
The answer is: sooner than you think. Many people wait until a crisis is already upon them — a foreclosure notice has arrived, or months of wages have already been garnished. By that point, options may be limited.
The best time to speak with a bankruptcy attorney is at the first sign of financial strain — when paying everyday bills and keeping up with debt begins to feel unmanageable. Early consultation gives an attorney the time to evaluate all available options, advise on timing, and help you make informed decisions before circumstances narrow your choices.
Bankruptcy law is more nuanced than it appears, and the stakes — including your home — are too high to navigate alone.
If you are struggling with debt, contact the experienced bankruptcy attorneys at Frost Law. Schedule a free consultation by calling 410-497-5947 or filling out our contact form.
