Bankruptcy filers in 2023 and onward can expect a larger motor vehicle exemption amount when they select either the 703.140 or 704.010 exemption series. Both series now allow bankruptcy filers to exempt up to $7,500 in motor vehicle equity, potentially allowing more people to avoid giving up their cars in bankruptcy.
Motor Vehicle Exemption in the 703.140 Series
Previously, bankruptcy filers could only protect up to $6,375 in motor vehicle equity from the bankruptcy process. The $1,125 increase to this amount may allow more people to protect more equity in a single or even multiple vehicles in their possession.
Should the new limit not be enough, however, bankruptcy filers who choose the 703 Series, may also use the wildcard exemption of $33,650.00 to completely protect one or more vehicles.
Additionally, any vehicle that was converted to accommodate a person with a disability may qualify as a health aid and be exempted from bankruptcy for that reason. Converting a vehicle, in this case, would mean installing special features such as a wheelchair lift, motorized steps, or special operation mechanisms to accommodate a disability.
Motor Vehicle Exemption in the 704.010 Series
Those with a substantial amount of home equity are likely to choose the 704 Series of exemptions because they can protect (at most) $678,378 in home equity when they file in 2023. The motor vehicle exemption for this series of exemptions was previously $3,625, so the new limit of $7,500 can let these filers protect even more equity in their motor vehicles.
As with the 703 Series, the 704 Series also includes language that can qualify a vehicle converted to accommodate a disability for exemption as a health aid.
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