Check out our legal blog and our video tax blog, "Taxes With Wolves."

Keeping Your Vehicle During Bankruptcy

Keeping Your Vehicle During Bankruptcy

In my first week, I have been presented many questions regarding the various areas of practice here at the Kotlyarov Law Group. The first issue I would like to address involves the status of a person’s vehicle when filing for bankruptcy. There are a few different options from which one can choose in this regard.

First, determine whether or not you are caught up on your vehicle payments.

Whether or not someone is behind on his or her car payments can determine whether they file a Chapter 7 or a Chapter 13 and/or whether or not they want to keep their car.. If one is behind on his or her car payments, he or she will likely have to surrender the vehicle to the lender if filing Chapter 7.

If he or she pays off the missed payments during the automatic stay of debts after filing for Chapter 13, he or she may then reaffirm the loan with the lender and keep the vehicle. This means that he or she will have to pay off the vehicle, including the the amount he or she is behind on the vehicle through his or her Chapter 13 plan.

The second question one must ask is how much is his or her vehicle worth.

The value of a vehicle is important because of something called exemptions. To put it in simple term, an exemption is what allows people to keep their stuff in a bankruptcy from being liquidated and sold for the benefit of their creditors. The state of Missouri allows a $3,000 motor vehicle exemption per individual ($6,000 for married couples, assuming both of their names are on the vehicle(s).

The Western District of Missouri generally uses the N.A.D.A. value of the vehicle. Click the link to go their website and find out what they value your vehicle to be worth.

Once valued, the bankruptcy attorney or professional can use that information to determine whether or not someone can keep their vehicle. For example, if someone has a car valued at $10,000 for which he or she has $2,000 in equity, he or she may exempt the car from being repossessed by the lender because their equity interest is below the $3,000 exemption threshold.

On the other hand, if someone is has a car valued at $10,000 and owns it outright, he or she will have to either surrender the vehicle to the bankruptcy estate or find a way to pay $7,000 to the bankruptcy estate if they want to file for a Chapter 7 bankruptcy. Therefore, the general idea is that the person must own $3,000 dollars or less of an interest in a vehicle for it to be considered exempt, and therefore allowing the person to keep it.

Additionally, there have been some questions as to what qualifies as a “motor vehicle” in the state of Missouri. Basically, it seems that Missouri sees a “motor vehicle” as a car, truck, motorcycle, or all-terrain vehicle (not an exclusive list). Essentially, Missouri is looking to exclude watercraft in its definition of “motor vehicle.” However, the relevant precedent appears to only address recreational watercraft.

Bradford Love

This is solely meant to be a rough informational overview of the motor vehicle exemption for the state of Missouri bankruptcy procedures. Because I am currently only a student and not yet licensed to practice law, it is not meant to constitute legal advice in any way but merely a description of what could possibly be the case. If one wishes to learn more, he or she should consult a licensed professional. The opinion above reflects the author’s individual thoughts and may not reflect the opinions of the Kotlyarov Law Group as a whole.

Tags: , ,


  1. whitewater raft
    December 26, 2016

    Hey very cool website!! Man .. Excellent .. Amazing .. I will bookmark your web site and take the feeds also…I’m happy to find numerous useful information here in the post, we need develop more techniques in this regard, thanks for sharing. . . . . .

  2. Mable
    December 31, 2016

    Great post. I was checking continuously this blog and I’m impressed! Extremely helpful information specially the last part 🙂 I care for such information much. I was seeking this particular information for a long time. Thank you and best of luck.

    • Jason Kotlyarov
      January 3, 2017

      Thank you!

  3. Ulysse
    January 2, 2017

    I appreciate, cause I found just what I was looking for. You’ve ended my four day long hunt! God Bless you man. Have a great day. Bye

    • Jason Kotlyarov
      January 3, 2017

      Happy to help!

  4. Hermes Birkin
    January 2, 2017

    You can certainly see your enthusiasm in the work you write. The world hopes for even more passionate writers like you who are not afraid to say how they believe. Always go after your heart.

    • Jason Kotlyarov
      January 3, 2017

      Thank you!

  5. Paul
    January 3, 2017

    I like the helpful info you provide in your articles. I’ll bookmark your blog and check again here regularly. I am quite certain I will learn plenty of new stuff right here! Good luck for the next!

  6. Zola Hamnon
    February 28, 2017

    “Great Blogpost! Thanks for one’s marvelous posting! I _genuinely enjoyed”

  7. love
    March 2, 2017

    Thanks-a-mundo for the blog post. Will read on…

  8. bob
    March 4, 2017

    Wonderful blog! I found it while browsing on Yahoo News. Do you have any suggestions on how to get listed in Yahoo News? I ave been trying for a while but I never seem to get there! Thanks

  9. Chuck
    August 9, 2017

    I simply want to tell you that I’m beginner to blogs and certainly liked you’re website. Very likely I’m want to bookmark your site . You absolutely have really good well written articles. Cheers for sharing your webpage.

  10. ManuelWaync
    December 17, 2017

    Many thanks for sharing with us, I always learn new things from your posts.

  11. TimothyCes
    December 18, 2017

    Great site, how do u get all this information?I have read a couple of posts on your website and I really like your style. Thanks a million, keep up the good work.

  12. QuadroCibre
    December 19, 2017

    Great post\Nice post, I love it so much.I was pretty lucky to discover your website. It has a lot of useful information!

  13. Gerald
    January 10, 2018

    Thank you for your fantastic blog. It was actually very useful. I am just so happy I found this.

Leave a Comment