Retaining Motor Vehicles

1.1 What Are Motor Vehicle Exemptions?

• Motor vehicle exemptions are legal provisions that determine which portion of the value of your vehicle is protected during bankruptcy. The purpose is to ensure that you can keep a means of transportation to continue working, earning income, and meeting your basic needs, such as transportation to and from school, stores and medical appointments.
  

1.2 Federal vs. State Exemptions

• Most states have their own bankruptcy exemptions, which can vary significantly from the federal exemptions. Understanding which set of exemptions applies to your case is essential. Generally, you can choose between federal and state exemptions, but not both. Wyoming does not permit the use of the federal exemptions.
  

1.3 Common Motor Vehicle Exemption Limits

• Every state sets its own limits on motor vehicle exemptions, typically ranging from a few thousand dollars to more generous amounts. It's important to know your state's specific limit to determine how much of your vehicle's value you can protect.
  

Bankruptcy can affect not only individuals but also married couples. When filing jointly, you may wonder if there are ways to double up your motor vehicle exemptions to protect both spouses' vehicles. Fortunately, there are strategies to maximize your protection:

2.1 Filing Jointly vs. Individually

• Before anything else, you and your spouse must decide whether to file jointly or individually. Filing jointly allows you to double most exemption limits, including motor vehicle exemptions. However, it also means both your incomes and assets will be considered together, which could affect your eligibility.
  

2.2 Understanding Joint Exemptions

• In states that allow joint exemptions, married couples can usually double the exemption limit for their motor vehicles. For example, Wyoming allows a $5,000 exemption per vehicle, a married couple filing jointly could protect up to $10,000 worth of vehicle value.
  

2.3 Utilizing Wildcard Exemptions

• Some states offer wildcard exemptions that can be used for any property, including motor vehicles. These exemptions allow you to protect additional assets beyond the specific motor vehicle exemptions. Be sure to explore these options with your bankruptcy attorney. However, Wyoming does not permit wildcard exemptions.
  

Owning a motorcycle without equity in it can be an advantage when facing bankruptcy. Equity refers to the value of the motorcycle minus any outstanding loans or liens. If your motorcycle has no equity, you may have a better chance of keeping it during bankruptcy proceedings.

3.1 The Role of Equity in Bankruptcy

• In a Chapter 7 bankruptcy, the bankruptcy trustee may sell your assets to repay your creditors. However, if there's no equity in your motorcycle, there's nothing to distribute to creditors, making it less likely that the trustee will seize it.
  

3.2 Chapter 13 and Equity

• In Chapter 13 bankruptcy, you can keep your property, including a motorcycle with no equity, as long as you can afford to pay for it through your repayment plan. Since the lack of equity means there's nothing to factor into the plan, it can be an advantageous situation.
  

3.3 Timing is Key

• Timing is crucial when dealing with a motorcycle with no equity. If you plan to file for bankruptcy, avoid selling or transferring the motorcycle shortly before filing, as this can raise suspicions and potentially jeopardize your case.
  

Whether you're a single filer or part of a married couple, there are practical steps to ensure you get the most out of your motor vehicle exemptions:

4.1 Consult with a Bankruptcy Attorney

• Before making any decisions, consult with an experienced bankruptcy attorney who can guide you through the process, help you choose the right exemptions, and ensure that you maximize the protection for your motor vehicle.

4.2 Document the Value of Your Vehicle

• Gather all relevant documents to prove the value of your vehicle, such as blue book values, appraisals, or repair estimates. This documentation can be vital in demonstrating the value of your exemption.

4.3 Maintain Insurance and Loan Payments

• Continue making insurance and loan payments on your vehicle during bankruptcy proceedings. Keeping your vehicle insured and up-to-date on payments will demonstrate your commitment to retaining it.

4.4 Be Honest and Transparent

• Honesty is essential throughout the bankruptcy process. Disclose all relevant information about your motor vehicle and financial situation to avoid potential legal issues.
  

In the tumultuous journey of bankruptcy, understanding motor vehicle exemptions can help you keep your wheels turning and your life moving forward. Whether you're a married couple looking to double up on exemptions or navigating the unique situation of a motorcycle with no equity, the key is to consult with a bankruptcy attorney who can guide you through the process and protect your essential mode of transportation. Bankruptcy is not the end of the road; it's a chance to reset and rebuild your financial future while retaining the assets you need most.

5.1 Contact Hampton Young Law

• At Hampton Young Law, we know how debt can impact an individual or married couple. If you have difficulty paying bills, have a steady income, and want to save your home and vehicle, speak to a bankruptcy attorney in Wyoming today by filling out our online form or calling us at 307-797-2486. We will schedule a free 15-minute strategy session so that you get the answers you need to all your financial questions.