The District of Columbia motor vehicle exemption and wildcard exemptions help 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 Washington D.C. car exemption and wildcard exemptions: how much they are, what types of vehicles are covered, how these exemptions work for married couples, how to find the applicable statutes, 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
District of Columbia’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 Washington D.C.'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 District of Columbia’s Motor Vehicle Exemption
In the District of Columbia, you can exempt up to $2,575 in equity in your car or other vehicle.
The Federal Motor Vehicle Exemption
Washington D.C. allows you to choose between the District of Columbia 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 the District of Columbia’s Wildcard Exemption to Protect Your Car
If the equity in your car is more than $2,575, you may be able to cover the extra equity by using a wildcard exemption. A wildcard exemption can be used to exempt any type of property and it can be added to the motor vehicle exemption. The District of Columbia has a wildcard exemption of $850 plus up to $8,075 of the unused portion of the District of Columbia homestead exemption.
For example, if you still have $8,075 available in your homestead exemption, you can combine the $8,925 ($850 plus $8,075) wildcard exemption with your $2,575 motor vehicle exemption. This means that you can protect and keep a car worth up to $11,500 if you file bankruptcy.
Can Married Couples Double the District of Columbia’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. In District of Columbia, your motor vehicle exemption is doubled to $5,150 if you are a married couple filing a joint bankruptcy.
(To learn about the advantages and disadvantages of joint bankruptcy filings, see Nolo's section on Bankruptcy Options for Married Couples).
What Vehicles Are Covered by the Motor Vehicle Exemption?
The District of Columbia motor vehicle exemption covers your car, truck, van, or other vehicle but you can only use it to exempt one vehicle.
Checking District of Columbia’s Exemption Laws
You can find District of Columbia’s motor vehicle exemption at District of Columbia Code Annotated § 15-501 (a)(1).
You can find the District of Columbia statutes on the website of the District of Columbia government at http://brc.dc.gov/licenses/dccode.asp. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the District of Columbia Exemption Amounts Are Updated
The exemption laws in District of Columbia change periodically. Check the latest exemption amounts to ensure you can exempt all of your property before filing bankruptcy.