May 22, 2026

Maryland Governor Wes Moore signed Senate Bill 939 (“SB 939”), a bankruptcy exemption law that expanded protections for certain owner occupied residential real property in bankruptcy proceedings. The law increased Maryland’s residential real property exemption to $125,000 and extended the exemption to certain homes held in revocable trusts. The legislation takes effect on June 1, 2026. SB 939 amended Maryland’s exemption framework for certain residential property in bankruptcy proceedings and expressly included certain revocable trust property within the exemption framework.

The legislation revised the amount of Maryland’s residential real property exemption under state law and applied the exemption to certain owner-occupied residential property held in revocable trusts. For mortgage servicers, the law may affect bankruptcy monitoring, exemption reviews, and the evaluation of residential collateral in borrower bankruptcy proceedings. As bankruptcy filings continue to involve increasingly complex ownership and title structures, servicers and other industry stakeholders may continue to monitor how Maryland courts apply the revised exemption framework after the law takes effect.