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Will I Lose My Car If I Declare Bankruptcy?

Posted by Rory Vohwinkel | Feb 14, 2019 | 0 Comments

If you are thinking about declaring Chapter 7 or Chapter 13 bankruptcy in Nevada, you likely have a lot of questions about how bankruptcy can affect your property. Like with many states, Nevada law allows you certain exemptions for various pieces of your property. These exemptions can protect these assets and keep them out of reach from most of your creditors. One of those exemptions applies to your motor vehicle. But that doesn't mean there aren't circumstances where you could be forced to sell your car in bankruptcy.

That's why it is so important to work with an experienced Nevada bankruptcy attorney. The rules that dictate whether your property is exempt or not can be complicated; having an experienced attorney to guide you through the process and answer your questions is invaluable. If you are considering filing bankruptcy in Nevada, contact Vohwinkel Law today.

Nevada's Motor Vehicle Exemption

The exemption for motor vehicles is set out In Nevada Statute 21.090(f). The statute states as follows:

Except as otherwise provided in paragraph (p), one vehicle if the judgment debtor's equity does not exceed $15,000 or the creditor is paid an amount equal to any excess above that equity.

The exemption doesn't apply to just the value of your vehicle. Instead, it exempts any equity you have. Equity is the value of your vehicle minus any debt you owe on it. For example, if your car is worth $10,000 and you owe $5,000 on your auto loan, you have $5,000 in equity in the vehicle. Many times a vehicle will be worth less than the amount owed for it, making the entire vehicle exempt.

There are additional exemptions if you own a vehicle that is modified to assist with mobility for a person that is permanently disabled. Any vehicle modified to assist a person with a permanent disability is completely exempt regardless of whether or not you have any equity in it.

However, it is important to understand that an exemption doesn't protect your vehicle from all creditors. It can keep the bankruptcy trustee from selling your vehicle in order to pay your unsecured creditors, but it doesn't absolve you of your auto loans. If you are ultimately unable to keep up your payments, it is possible your vehicle can be repossessed despite the exemption.

Contact a Nevada Bankruptcy Attorney With Any Questions About Your Exemptions

Nevada's motor vehicle exemption is only one of many important exemptions that may apply to you if you choose to file for bankruptcy protection. It is important you make the most of your bankruptcy filing by keeping your property, and an experienced Nevada bankruptcy lawyer can help you with that.

Rory Vohwinkel has a long track record of helping his clients navigate the bankruptcy process. His detailed knowledge of Nevada's unique exemption laws has allowed his clients to keep thousands of dollars worth of their property that might otherwise be sold by the bankruptcy trustees. To learn about how Nevada exemption laws can work in your favor, contact Vohwinkel Law today for a free consultation.

About the Author

Rory Vohwinkel

Rory Vohwinkel began his legal career at one of Nevada's oldest and largest law firms, representing clients in commercial litigation and business transactions. Rory went on to serve as the sole in-house attorney for a national real estate investment and property management company. In 2009, Rory...


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