If you file for bankruptcy in North Dakota you can use the motor vehicle exemption and several other exemptions to protect a large amount of equity in your car, truck, van, or other vehicle. Here you’ll find information about the North Dakota car exemption and additional exemptions you can use to protect car equity.
(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
North Dakota’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 North Dakota’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 North Dakota’s Motor Vehicle Exemption
In North Dakota, you can exempt up to $2,950 in equity in your car or other vehicle.
Example. Joel owns a 2006 Honda Civic worth $4,000. He owes the dealer $2,000 on the loan, leaving him with $2,000 in car equity. Joel can file a Chapter 7 bankruptcy and fully protect his car using the North Dakota motor vehicle exemption.
If you are physically disabled and have invested at least $1,500 into modifying your vehicle with assistive devices, you can protect up to $32,000 of equity in that vehicle.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but North Dakota is not one of these states.
Using North Dakota’s Additional Exemptions to Protect Your Car
North Dakota allows you to protect additional property if you do not claim the homestead exemption or the crops and grain exemption or if you are unmarried and have no dependents. If the equity in your car is more than $2,950, you may be able to cover the extra equity by using one or several of these exemptions. Here are the details of those other exemptions:
- You can protect up to $7,500 of any property if neither you or your spouse claim the homestead exemption.
- You may protect up to an additional $7,500 of property if you do not claim any exemption for crops or grain.
- If you are unmarried and have no dependents, you can protect up to an additional $3,750 of property.
Example. Jennifer is single and has no dependents. She files bankruptcy and does not claim a homestead exemption because she does not own a house. She also has no crops or grain, so she does not claim the crops and grain exemption. She owns a 2011 Honda Accord that is worth $16,000 and is paid in full. She can use the North Dakota motor vehicle exemption ($2,950), the unused homestead exemption ($7,500), the unused crops and grain exemption ($7,500), and the unmarried and no dependents exemption ($3,750) to protect up to $21,700 of equity in any property she owns, including her car.
Can Married Couples Double North Dakota’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Married couples can double the North Dakota motor vehicle exemption to protect up to $5,900 of equity in a motor vehicle.
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?
The North Dakota motor vehicle exemption protects motor vehicles, including cars, trucks, vans, and motorcycles.
Checking North Dakota’s Exemption Laws
You can find North Dakota’s motor vehicle exemption at N.D. Cent. Code Section 28-22-03.1.
You can find the North Dakota statutes on the website of the North Dakota Legislative Branch at www.legis.nd.gov/information/statutes/cent-code.html. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the North Dakota Exemption Amounts Are Updated
The exemption laws in North Dakota change periodically. The website of the North Dakota Legislative Branch indicates whether the statutes posted on the website are current as of the most recent legislative session. You can find the North Dakota Legislative Branch’s website at www.legis.nd.gov/information/statutes/cent-code.html.