The Virginia motor vehicle exemption helps determine whether you can keep your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. Here you’ll find information about the Virginia 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
Virginia’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 Virginia’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 Virginia's Motor Vehicle Exemption
In Virginia, you can exempt up to $6,000 in equity in your car or other vehicle. If you need the car for your occupation or your education, the exemption is increased to $10,000.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the Federal Bankruptcy Exemptions instead of state exemptions, but Virginia is not one of these states.
Using Virginia's Wildcard Exemption to Protect Your Car
If the equity in your car is more than $6,000 (or $10,000 if the car is used for your occupation or education), you may be able to cover the extra equity by using the remainder of any unused homestead exemption. The Virginia homestead exemption is $5,000, or $10,000 if you are over 65 years of age or are disabled. If you did not use the homestead exemption to exempt your house, you can use it to exempt the rest of your vehicle's value.
Example. If the equity in your car is $10,000, you do not own a home, and you use your car for personal transportation and not for your job or school, you can use the motor vehicle exemption to protect $6,000 in the vehicle's equity and use $4,000 of the homestead exemption to protect the rest.
Can Married Couples Double Virginia's Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Virginia allows this, so a married couple can exempt $12,000 in two motor vehicles and double the homestead exemption to $10,000, providing an extra potential wildcard exemption.
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 Virginia motor vehicle exemption covers the motor vehicle's value only.
Checking Virginia's Exemption Laws
You can find Virginia’s motor vehicle exemption at Va. Code Ann. 34-26.
You can find the Virginia statutes on the website of the Virginia General Assembly Legislative Information System at http://leg1.state.va.us. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the Virginia Exemption Amounts Are Updated
The exemption laws in Virginia change periodically. Check the statute at http://leg1.state.va.us to confirm the current exemption amount.