The South Dakota Motor Vehicle Exemption in Bankruptcy
South Dakota doesn't have a motor vehicle exemption, but you can use the general property exemption to protect equity in your car if you file for bankruptcy.
South Dakota does not have a specific motor vehicle exemption. However, if you file for bankruptcy in South Dakota, you can use South Dakota’s general property exemption to protect equity in your car, truck, van, or other vehicle. Here you’ll find information about the South Dakota 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 South Dakota Property Exemption and Your Car
South Dakota’s general property 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 South Dakota’s property 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 South Dakota's General Property Exemption
In South Dakota, you can exempt up to $6,000 in equity in your car or other vehicle if you are the head of household or $4,000 if you are not the head of household.
Example. Michael and Julie are a married couple residing in South Dakota. They jointly own a 2010 Ford Ranger worth $14,000. They owe the dealer $5,000 on the loan, so there is $9,000 of equity in their truck. Michael is the head of household, so he can protect $6,000 or equity, and Julie can protect up to $4,000 of equity. Therefore, Michael and Julie can file Chapter 7 bankruptcy and fully protect their truck using the South Dakota motor vehicle exemption.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but South Dakota is not one of these states.
Can Married Couples Double South Dakota's General Property Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. South Dakota does not allow you to double the exemption, but instead allows the head of household to protect $6,000 of equity and the head of household’s spouse to protect $4,000, for a total of $10,000.
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?
South Dakota’s general property exemption allows you to protect any property you own, including cars, trucks, motorcycles, and vans as well as insurance proceeds or proceeds from the sale of your vehicle.
Checking South Dakota's Exemption Laws
You can find South Dakota’s general property exemption at S.D. Codified Laws Ann. Section 43-45-4.
You can find the South Dakota statutes on the website of the South Dakota Legislature at http://legis.state.sd.us/statutes/. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the South Dakota Exemption Amounts Are Updated
The exemption laws in South Dakota change periodically. The website of the South Dakota Legislature indicates whether the statutes posted on the website are current as of the most recent legislative session. You can find the South Dakota Legislature’s website at http://legis.state.sd.us/statutes/.