The Connecticut Motor Vehicle Exemption in Bankruptcy
Learn about Connecticut's motor vehicle exemption, and whether it will allow you to keep your car in Chapter 7 bankruptcy.
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. 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.
(For more information about exemptions, including how they work and which ones you can use, see our Bankruptcy Exemptions area. For information specific to the motor vehicle exemption, see our Motor Vehicle Exemption in Bankruptcy area.)
The Motor Vehicle Exemption and Your Car
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?
The Amount of Connecticut’s Motor Vehicle Exemption
In Connecticut, you can exempt up to $3,500 in equity in your car or other vehicle.
The Federal Motor Vehicle Exemption
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 our article The Federal Bankruptcy Exemptions.
Using Connecticut’s Wildcard Exemption to Protect Your Car
If the equity in your car is more than $3,500, you may be able to cover the extra equity by using a wildcard exemption. A wildcard exemption can be applied towards any type of property and can be added 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 of any loans. You can add the $1,000 wildcard exemption to your $3,500 motor vehicle exemption to exempt the entire value of your car so the bankruptcy trustee cannot take it and sell it.
Can Married Couples Double Connecticut’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. In Connecticut, married couples filing a joint bankruptcy can double the motor vehicle exemption to $7,000. Similarly, your wildcard exemption is also doubled.
Learn more about joint bankruptcy options in Nolo's section on Bankruptcy Considerations for Married Couples.
What Vehicles and Insurance Are Covered by the Motor Vehicle Exemption?
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.
Checking Connecticut’s Exemption Laws
You can find Connecticut’s motor vehicle exemption at Connecticut General Statutes Annotated § 52-352b (j).
You can find the Connecticut statutes on the website of the Connecticut General Assembly at www.cga.ct.gov/current/pub/chap906.htm#Sec52-352b.htm. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the Connecticut Exemption Amounts Are Updated
The exemption laws in Connecticut change periodically. Make sure to check the most current exemption amounts before filing bankruptcy to ensure you can exempt all of your property.