The New Hampshire Motor Vehicle Exemption in Bankruptcy
Learn about New Hampshire's motor vehicle exemption and how it affects your car in bankruptcy.
The New Hampshire motor vehicle exemption helps determine whether you can keep your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. This exemption allows you to protect up to $4,000 in vehicle equity, more if you are married and filing jointly. You can also use other exemptions to protect
Here you’ll find information about the New Hampshire car exemption: how much it is, what types of vehicles it covers, how it works 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 Motor Vehicle Exemption and Your Car
New Hampshire’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 New Hampshire’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 New Hampshire’s Motor Vehicle Exemption
In New Hampshire, you can exempt up to $4,000 in equity in your car or other vehicle.
Example. Walt owns a 2007 Honda Odyssey. The car is worth $16,000, and Walt owes the dealership $13,000, which means Walt has $3,000 in vehicle equity. Walt can file Chapter 7 bankruptcy in New Hampshire and fully protect his car using the $4,000 motor vehicle exemption.
The Federal Motor Vehicle Exemption
New Hampshire allows you to choose between the state 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 New Hampshire’s Wildcard Exemption to Protect Your Car
If the equity in your car is more than $4,000, you may be able to cover the extra equity by using a wildcard exemption. New Hampshire has a $1,000 wildcard exemption that you can use to protect any property. New Hampshire also allows you to protect up to an additional $7,000 worth of property using any leftover exemptions from bibles and books ($800 exemption), food & fuel ($400 exemption), furniture ($3,500 exemption), jewelry ($500 exemption), motor vehicle ($4,000 exemption), or tools of the trade ($5,000 exemption).
Example. Walt only owes $10,000 on his $16,000 Honda Odyssey; therefore he has $6,000 worth of vehicle equity. He can use the motor vehicle exemption to protect $4,000, the wildcard to protect $1,000, and since Walt only owns $500 worth of furniture, he can use the leftover furniture exemption to protect the last $1,000 of equity in his car.
Can Married Couples Double New Hampshire’s Motor Vehicle Exemption?
In New Hampshire, married couples filing a joint bankruptcy can double the motor vehicle exemption -- this means they can protect up to $8,000 of vehicle equity.
(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 New Hampshire motor vehicle exemption allows you to protect one automobile, such as a car, van, or truck. In New Hampshire, you can also protect insurance proceeds for lost or damaged property, up to the exemption amount, as long as the property would have been exempt had it not been lost or damaged.
New Hampshire’s Tools of the Trade Exemption
In New Hampshire, you can protect up to $5,00 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. Note that using your vehicle to commute to and from work will generally not qualify the vehicle as a tool of the trade.
Checking New Hampshire’s Exemption Laws
You can find New Hampshire’s motor vehicle exemption at N.H. Rev. Stat. Ann Section 521:2.