Effective July 1, 2013 the Motor Vehicle Exemption increased from $3,500 to $5,000. This provides additional “wiggle-room” in determining whether you can keep your motor vehicle(s) when you file Chapter 7. Now, each debtor has $5,000 from this exemption to protect all motor vehicles titled in the debtor’s name. These factors can come into play in making the decision:
- How much equity do you have in your vehicle?
- Are you filing bankruptcy alone or jointly with a spouse?
- Must you (or you and your spouse) use your $600 “wildcard” exemption to protect some other asset?
- Must you (or you and your spouse) use your entire homestead exemption to protect your residence?
If the amount of equity you have in your vehicle is $5,000 or less, then the trustee in a Chapter 7 case may not sell it to pay your creditors. You can find out the amount of equity you have by subtracting what you owe from the value of the vehicle.
If you file a joint case with your spouse and you are jointly-titled on a vehicle, the exemption on the vehicle can double to $10,000. Also, as discussed more specifically on our blog site here, the Homestead Exemption for an individual is $21,500; for joint filers $43,500. This exemption can often be used to provide additional protection for a vehicle(s).
Also, Georgia has a wildcard exemption of $600 that may be used to shield and protect any asset worth $600.00 or less from your trustee during a bankruptcy proceeding. Again, you can double that amount to protect jointly-titled property if you file bankruptcy jointly with a spouse. If you file as an individual, you may add up to $5,000 of any unused homestead exemption to your wildcard exemption if you rent rather than own your home or if you have $16,500 or less equity in your home. This can increase your wildcard exemption to a total of $5,600 or to $11,200 if you are filing jointly with a spouse. As a result, it may be possible to “stack” the dollar amounts used to shield and protect the equity in a vehicle(s) to $10,600 as an individual filer and to $21,200 if filing jointly.
Consult with one of our attorneys to discuss how the available exemptions can be allocated to maximize the protection of your vehicle as well as your other assets.