The Delaware Motor Vehicle Exemption in Bankruptcy
If you file for bankruptcy in Delaware, you can protect up to $15,000 in a car or vehicle you use to get to work or use in your work.
The Delaware motor vehicle exemption helps determine whether you can keep your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. If you use your car for transportation to work, or use it as part of your job, you can exempt up to $15,000 of vehicle equity in Delaware. You can exempt more if you are head of household or married filing jointly. Read on to learn 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
Delaware’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 [state]’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 Delaware’s Motor Vehicle Exemption
In Delaware, you can exempt up to $15,000 in equity in your car or other vehicle if you use it to get to work or to perform your job.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but Delaware is not one of these states.
Using Delaware’s Head of Family Exemption to Protect Your Car
If the equity in your car is more than $15,000, you may be able to cover the extra equity by using the head of family exemption. The head of family is allowed to protect an additional $500 of equity in any personal property. That means you can protect a total of $15,500 of equity in a vehicle, if you are eligible to claim the head of family exemption.
Can Married Couples Double Delaware’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Delaware allows you to double the motor vehicle exemption. A married couple filing a joint bankruptcy can each protect a vehicle that is necessary for employment, meaning they can protect up to $30,000 of vehicle equity.
What Vehicles and Insurance Are Covered by the Motor Vehicle Exemption?
Delaware allows you to protect equity in a vehicle for the purpose of employment. “For the purpose of employment” may include a vehicle that you use for transportation to and from work or to perform your work, such a delivery vehicle.
Checking Delaware’s Exemption Laws
You can find Delaware’s motor vehicle exemption at Del. Code Ann. Tit. 10 Section 4914(c)(2).
When the Delaware Exemption Amounts Are Updated
The exemption laws in Delaware change periodically. The State of Delaware website indicates the date of the legislative session after which the laws were updated, so you can determine if they are the most current figures and laws.