The Pennsylvania Motor Vehicle Exemption in Bankruptcy
If you file for bankruptcy in Pennsylvania you can protect some car equity with Pennsylvania’s wildcard exemption.
Pennsylvania does not have a motor vehicle exemption; however, if you file for Chapter 7 bankruptcy in Pennsylvania you can protect some equity in your car, truck, van, or other vehicle with Pennsylvania’s wildcard exemption. Alternatively, you can protect a lot more equity in your car if you choose to use the federal bankruptcy exemptions. Here you’ll find information about the Pennsylvania wildcard exemption and the federal motor vehicle 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.)
Exemptions and Your Car
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 available 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 Federal Motor Vehicle Exemption
Pennsylvania 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 Pennsylvania’s Wildcard Exemption to Protect Your Car
A wildcard exemption can be used to exempt any type of property. If you choose to use Pennsylvania’s state exemptions, you can use the wildcard exemption to exempt some equity in your motor vehicle. In Pennsylvania, you can exempt up to $300 in any property with the wildcard exemption.
Can Married Couples Double Exemptions?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. In Pennsylvania, married couples filing a joint bankruptcy can exempt up to $600 with the wildcard exemption.
Similarly, if you are using the federal exemptions, the federal motor vehicle exemption is doubled to $6,900 for married couples.
Learn more about joint bankruptcy options in Nolo's section on Bankruptcy Considerations for Married Couples.
Checking Pennsylvania’s Exemption Laws
You can find Pennsylvania’s wildcard exemption at Pennsylvania Consolidated Statutes Annotated § 8123.
You can find the Pennsylvania statutes on the website of the Pennsylvania General Assembly at http://www.legis.state.pa.us. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the Pennsylvania Exemption Amounts Are Updated
The exemption laws in Pennsylvania change periodically. Check the latest exemption amounts prior to filing bankruptcy to make sure you can exempt all of your property.