The Idaho Motor Vehicle Exemption in Bankruptcy
Find out if you can keep your car if you file for bankruptcy in Idaho.
The Idaho 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 Idaho car exemption: how much it is, what types of vehicles it covers, how it works for married couples, additional protection for cars you use in your business or that have health aids installed, how to find the applicable exemption 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
Idaho’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 Idaho’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 Idaho’s Motor Vehicle Exemption
In Idaho, you can exempt up to $7,000 in equity in your car or other vehicle.
Idaho’s exemptions are only available to residents of Idaho, meaning that you must intend to maintain a home in Idaho if you wish to use the exemptions.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but Idaho is not one of these states.
Using Idaho’s Wildcard Exemption to Protect Your Car
If the equity in your car is more than $7,000, you may be able to cover the extra equity by using a wildcard exemption. Idaho has a wildcard exemption that you can use to protect up to $800 of tangible personal property, including your motor vehicle. (Learn more in The Idaho Wildcard Exemption in Bankruptcy.)
For example, if you have $8,500 of equity in your car, you can use the motor vehicle exemption to protect $7,000 of equity and the wildcard to protect $800 worth of equity. This means you can protect a total of $7,800 worth of equity in your vehicle, leaving only $700 of unprotected value.
When the amount of unprotected value is relatively small, the cost of selling the car may use up the unprotected value and leave nothing for the trustee to pay to your creditors. When this happens, a trustee may choose to leave your vehicle alone. The trustee may also choose to let you “buy out” the unprotected equity, meaning you pay the unprotected amount (in this example, $700) to the trustee, and the trustee gives that money to your creditors and does not sell your car.
Can Married Couples Double Idaho’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. In Idaho, you may double the motor vehicle exemption, to protect up to $14,000 of equity.
What Vehicles and Insurance Are Covered by the Motor Vehicle Exemption?
You can use the Idaho exemption to protect one motor vehicle, such as a car, van, or truck. It also protects insurance proceeds for damage to or loss of your vehicle, for up to three months after you receive the proceeds. Insurance proceeds must be traceable to the vehicle that would have been exempt, had it not been damaged or lost, meaning you must be able to show that the money in question is the money that was paid for your vehicle insurance claim.
Filing a Notice of Exemption
If you receive notice that a creditor is going to satisfy a debt by taking your property, you must file a notice of exemption to protect your property. You may review the requirements for filing the notice of exemption at Idaho Code Section 11-203 or by contacting your local sheriff. You can view the notice of exemption requirements online at the Idaho Legislature website at www.legislature.idaho.com.
Additional Protection if You Use Your Vehicle in Your Job
In Idaho, you can also protect up to $2,500 of value in “tools of the trade,” meaning property you use to perform your job. If your vehicle is required to perform your job (simply commuting to and from work does not generally meet this standard), such as a delivery truck or tow truck, you can add this to your motor vehicle exemption to protect up to $9,500 of equity.
Additional Protection for Health Aids Installed in Your Car
Idaho permits you to protect an unlimited amount of value in health aids reasonably necessary to enable you or your dependents to work or sustain your health. If your vehicle is worth more because you installed health aids, such as lifts or assistive devices, you may be able to use this exemption to protect additional value in the vehicle. Different courts treat this exemption differently, so you should consult with a qualified attorney if you believe this exemption may apply to you.
Checking Idaho’s Exemption Laws
You can find Idaho’s motor vehicle exemption at Idaho Code Section 11-605.