Legal Question in Bankruptcy in Minnesota

when filing chapter 7 bankruptcy are you allowed to keep 2 cars

Asked on 2/16/13, 2:35 pm

2 Answers from Attorneys

David Kelly-952-544-6356 Kelly Law Office

Good question.

Under both the federal exemption and the state exemption, the automobile exemption is a per person exemption - one car per person.

So if you are married and the case is joint and one vehicle is in your name and the other is in your spouse's name, each of you can use your motor vehicle exemption.

If you are single, then your household just has one vehicle exemption. However, under the federal exemptions there is a wild card exemption that can be used for anything - up to almost $12,000. Typically in a situation like yours one vehicle would be put under the vehicle exemption and the other claimed exempt under the wild card.

Both the state and federal exemptions have dollar limits - $3,450 per vehicle for the federal and about a thousand more than that for the state. So the value of the vehicles makes a big difference too. If the federal exemptions are used, you can exempt the vehicle in part under the vehicle exemption and in part under the wild card. This would allow an exmeption claim substantially above the $3,450 limit.

A different but also important question is are you allowed to have two car loans. Usually, the answer to that is that you only are allowed to budget for one car loan per bankrupt debtor - so that would be one for you and one for your spouse if you have one.

The amount you need to exempt is the equity, not necessarily the actual vehicle value.

Perhaps I just should just have said that I can't answer this because you didn't provide enough info. As you can see, all sorts of variables make a difference. Your best bet is pick up the phone and call me so I can really evaluate your situation.

This is for general information purposes only and does not create an attorney-client relationship.

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Answered on 2/16/13, 2:57 pm

Sam Calvert Calvert Law Office

The bankruptcy law lets you keep a certain amount of "stuff", and if two cars fit inside the dollar limit of the amount of "stuff" you can keep, the answer is yes. Very, very generally you can keep $3450.00 of equity in a car and $11,975 of other "stuff" in a bankruptcy in Minnesota using the federal exemptions.

But, there are a number of factors that go into deciding which set of exemptions you can use and how much "stuff" you get to keep.

For instance, how long have you been in Minnesota?

Do you own any real estate with equity in it?

How much equity is in the real estate?

And, assuming you can exempt it, is it subject to a lien?

Can the lien be avoided?

Can the vehicle be redeemed from the lien?


I you are consulting with an attorney who is experienced in bankruptcy before deciding whether to file.

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Answered on 2/16/13, 7:52 pm

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