August 1, 2017
The Connecticut motor vehicle exemption helps determine whether you can keep your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. It also will help you figure out how much you'll have to pay in your monthly Chapter 13 repayment plan payment. Here you’ll find information about the Connecticut car exemption: how much it is, what types of vehicles it covers, how it works for married couples, how to find the applicable statute, and more.
Connecticut’s motor vehicle exemption plays a large role in determining whether or not the bankruptcy trustee can take your vehicle to repay your unsecured creditors. If the equity in your car is less than Connecticut’s car exemption, then the trustee cannot sell it. If the equity in your car is significantly more than the applicable exemption amount, the trustee is likely to sell your car to repay your unsecured creditors. For details, see The Motor Vehicle Exemption: Can You Keep Your Car in Chapter 7 Bankruptcy?
Keep in mind that even if your car is safe from the bankruptcy trustee, the lender may be able to repossess your car during or after bankruptcy. To learn more, see Your Car in Chapter 7 Bankruptcy and If You Are Behind on Your Car Payments, Can Chapter 7 Help?
In Connecticut, you can exempt up to $3,500 in equity in one car or another vehicle.
Connecticut allows you to choose between the state exemptions or the federal bankruptcy exemptions. The federal motor vehicle exemption amount changes every three years. To find the current amount, see The Federal Bankruptcy Exemptions.
If the equity in your car is more than $3,500, you might be able to cover the extra equity by using a wildcard exemption. A wildcard exemption can be applied towards any type of property, so you can add it to the motor vehicle exemption. Connecticut has a $1,000 wildcard exemption.
For example, let’s say you own a car worth $4,500 free and clear (you don't have a loan on it). You can add the $1,000 wildcard exemption to your $3,500 motor vehicle exemption and exempt the entire value of your car. The bankruptcy trustee (the official tasked with overseeing your case) cannot take it and sell it.
In Connecticut, married couples filing a joint bankruptcy (filing together) can double the motor vehicle exemption to $7,000 if they both own the vehicle. Similarly, a married couple's wildcard exemption will also be doubled.
Learn more about joint bankruptcy options Filing Considerations for Married Couples.
The Connecticut motor vehicle exemption covers your car, truck, van, or other vehicle. But you can only use it to exempt one motor vehicle. If your car gets damaged or destroyed, any insurance proceeds you receive are also exempt to the extent your motor vehicle was exempt.
You can find Connecticut’s motor vehicle exemption at Connecticut General Statutes § 52-352b(j).
The exemption laws in Connecticut change periodically. Make sure to locate the most current exemption amount before filing bankruptcy to ensure you can exempt all of your property.