If you file for bankruptcy in Mississippi, you can use Mississippi's general property exemption to protect equity in your car, truck, van, or other vehicle. If you are 70 or older, you can use a very large wildcard exemption to protect even more equity. Here you’ll find information about the Mississippi exemptions you can use to protect your car: what types of exemptions are available, exemption amounts, covered vehicles, how the exemptions work 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 Mississippi Exemptions and Your Car
Mississippi’s exemptions play 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 the exemptions you can use to protect your car, 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 Mississippi’s Personal Property Exemption
Mississippi does not have an exemption specifically for motor vehicles. Instead, Mississippi lumps together several categories of personal property and allows you to protect one large lump sum. In Mississippi, you can exempt up to $10,000 of equity in your vehicle, household goods, crops, animals, tools of the trade, cash, and health aids combined.
Example. Harold owns a 2008 Honda Fit worth $13,000. He owes the dealer $9,000, so there is $4,000 of equity in the car. He can use the Mississippi personal property exemption to fully protect his car, and $6,000 of the exemption will remain available to protect his household goods, cash, and any other other items covered by this exemption.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but Mississippi is not one of these states.
Using Mississippi’s Wildcard Exemption to Protect Your Car
Mississippi allows residents age 70 or older to protect up to $50,000 of any property, including a vehicle. (Learn more in The Mississippi Wildcard Exemption in Bankruptcy.)
Can Married Couples Double Mississippi’s Personal Property Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Married couples filing jointly can double the Mississippi personal property exemption, for a total of $20,000.
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?
You can use the Mississippi personal property exemption to protect any type of motor vehicle, including cars, vans, and trucks. Mississippi also allows you to protect insurance proceeds for lost or damaged vehicles, or the sale proceeds from a vehicle, to the extent that the vehicle would have been protected if it had not been lost, damaged, or sold.
Checking Mississippi’s Exemption Laws
You can find Mississippi’s motor vehicle exemption at Miss. Code Ann. 85-3-1(a).