Legal Question in Bankruptcy in Maryland

Re: Exempted Monies

The word "exempt" may not be what you are really asking about. If the property is truly exempt, then money will not be distributed to creditors from the sale of that asset.

Usually, as relates to funds from the sale of property, the word exempt means that the property has been listed as "exempt" by the debtor on his or her bankruptcy schedules.

Ordinarily, exempt property wil not be distributed to creditors at all. There are rather complicated rules that determine whether or not property can be claimed as exempt.

For example, every debtor is permitted to keep a certain base amount of assets even after a bankruptcy (In Maryland it amounts to roughly $6,000). Each debtor identifies in his/her schedules which items he/she wishes to keep as exempt. Unless someone objects to the exemptions, those listed assets will not be available for distribution to creditors.

Additionally, there are other exemptions in addition to the base level of $6000. For example, in Maryland a married couple may own a house together. If only the husband files bankrutpcy, and there are no joint debts, then the property itself is going to be "exempt". It will be as if that property were not part of the estate in bankruptcy and it will not be available to satisfy the claims of creditors. This will be true even if the couple sell the house. In that case, the proceeds of the sale will be exempt and will not be available at all for creditors.

There are other "exemptions" as well.

It is possible that you have simply used the wrong word and "exemptions" are not really what you are asking about.

Generally speaking, a creditor who has filed a proper proof of claim may receive funds after the sale of assets (if there are funds remaining after secured creditors and administrative expenses have been paid). If a creditor is concerned about when funds will be distributed, such creditor should contact the trustee's office directly.