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Car Repossession and Bankruptcy: Can I Get My Car Back?
If you have filed for bankruptcy, and your car has been repossessed within the past 90 days, you may be able to get it back. In order to do so, you will need to have your attorney file a motion claiming that the repossession is a "preferential transfer". This means that the property and it's value is unfairly transferred to one creditor without any benefit for other creditors involved.
What Happens to the Returned Car?
If your attorney can get the car back into your bankruptcy estate, then you have several options available. If you have sufficient exemption to cover the equity in the car, then you can keep it. If you don't then you may reaffirm the debt, or redeem the property by offering up a lump sum of cash equivalent to your equity in the car.
What if the Car is Worth Less than What I Owe?
If the car is worth less than what you owe on it, then the bankruptcy trustee will "abandon" it, meaning you will ba able to keep it. However, that doesn't mean your creditor can't repossess it again after the bankruptcy case is closed. Make sure your attorney talk to the creditor with the lien on the car to negotiate a way for you to keep it and get caught up on payments.
How Much of My Equity is Protected?
Exemption amounts for a motor vehicle vary by state. See the list below to find out how much of your equity in your car is covered by your states exemption:
| State | Automobile Equity Exemptions |
| Alabama | Use Wildcard Exemption up to $3,000 |
| Alaska | Up to $3,750, Value Cannot Exceed $25,000 |
| Arizona | Up to $5,000 ($10,000 if Debtor is Disabled) |
| Arkansas | Up to $1,200 |
| California | System 1: Up to $2.550; System 2: Up to $3,300 |
| Colorado | Up to $5,000 |
| Connecticut | Up to $3,500 |
| Delaware | Use Wildcard Exemption up to $500 |
| Florida | Up to $1,000 |
| Georgia | Up to $3,500 |
| Hawaii | Up to Wholesale Value of $2,575 |
| Idaho | Up to $5,000 |
| Illinois | Up to $2,400 |
| Indiana | Use Wildcard Exemption up to $8,000 |
| Iowa | Use Wildcard Exemption up to $1,000 |
| Kansas | Up to $20,000 (Unlimited for Disabled Persons) |
| Kentucky | Up to $2,500 |
| Louisiana | Up to $7,500 |
| Maine | Up to $5,000 |
| Maryland | Use Wildcard Exemption up to $11,000 |
| Massachusetts | Must be Reaffirmed or Redeemed |
| Michigan | Up to $3,175 |
| Minnesota | Up to $4,000 ($40,000 if Modified for Disabled Person) |
| Mississippi | Must be Reaffirmed or Redeemed |
| Missouri | Up to $3,000 |
| Montana | Up to $2,500 |
| Nebraska | Use up to $2,500 of Unused Homestead Exemption |
| Nevada | Up to $15,000 (Unlimited if Equipped for Disabled Person) |
| New Hampshire | Up to $4,000 |
| New Jersey | Must be Reaffirmed or Redeemed |
| New Mexico | Up to $4,000 |
| New York | Up to $2,400 |
| North Carolina | Up to $3,500 |
| North Dakota | Up to $1,200 |
| Ohio | Up to $3,225 |
| Oklahoma | Up to $7,500 |
| Oregon | Up to $2,150 |
| Pennsylvania | Use Wildcard Exemption up to $300 |
| Rhode Island | Up to $12,000 |
| South Carolina | Up to $5,000 |
| South Dakota | Use Wildcard Exemption up to $6,000 |
| Tennessee | Use Wildcard Exemption Up to $4,000 |
| Texas | One Motor Vehicle Per Licensed Driver |
| Utah | Up to $2,500 |
| Vermont | Up to $2,500 |
| Virginia | Up to $2,000 |
| Washington | One Vehicle Up to $2,500, Two Vehicles up to $5,000 for Joint Filers |
| West Virginia | Up to $2,400 |
| Wisconsin | Up to $1,200 (May Use up to $5,000 of Unused Personal Property Exemption) |
| Wyoming | Up to $2,400 |
Talk to a Lawyer
If your car has been repossessed, and you're considering bankruptcy, then you'll need an attorney to convince the court to order a creditor to return a repossessed car or any other property. Talk to a Bankruptcy Lawyer to find out what options are available to keep all of your property and eliminate as much debt as possible.