The Kansas Motor Vehicle Exemption in Bankruptcy

Because of Kansas' generous motor vehicle exemption law, you can protect $20,000 worth of car equity if you file for bankruptcy.

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The Kansas motor vehicle exemption helps determine whether you can keep your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. The Kansas motor vehicle exemption is one of the most generous in the country -- you can protect up to $20,000 in your car. This is increased if you are married and filing a joint bankruptcy or if your car is outfitted with equipment to assist with a disability. Read on to learn more about the Kansas car exemption.

(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

Kansas’ 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 Kansas’ 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 Kansas’ Motor Vehicle Exemption

In Kansas, you can exempt up to $20,000 in equity in your car or other vehicle. If your vehicle is outfitted with equipment to assist with a disability, the motor vehicle exemption is unlimited.

Example. Dorothy owns a 2010 Honda Odyssey. She owes the dealership $15,000 and the minivan is worth $30,000, which means she has $15,000 worth of equity in the vehicle. Dorothy can protect the minivan if she files a Chapter 7 bankruptcy because the Kansas exemption is enough to cover her equity.

The Federal Motor Vehicle Exemption

Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but Kansas is not one of these states.

Can Married Couples Double Kansas’ Motor Vehicle Exemption?

Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Kansas allows married couples to double the exemption, to protect up to $40,000 worth of equity in a vehicle.

(To learn more about filing a joint bankruptcy with your spouse, see Bankruptcy Considerations for Married Couples).

What Vehicles and Insurance Are Covered by the Motor Vehicle Exemption?

The Kansas exemption allows you to protect one vehicle of any type, but it must be a vehicle that you use regularly to travel to and from work.

Additional Exemption Amounts for Work Vehicles

In Kansas, you can protect up to $7,500 of equity in “tools of the trade,” meaning property you use to carry on your trade or business. If you use your vehicle to carry on your profession, for example, a tow truck, you can protect additional value under this exemption. However, using your vehicle to commute to and from work generally does not qualify the vehicle as a tool of the trade.

Checking Kansas’ Exemption Laws

You can find Kansas’ motor vehicle exemption at Kan. Stat. Ann. Section 60-2304(c).

You can find the Kansas statutes on the website of the Kansas Legislature at www.kslegislature.org.  To learn more about finding and checking state statutes, see Nolo’s Laws and Legal Research area.

by: , Attorney

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