Wisconsin's generous motor vehicle and personal property exemptions help you keep your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. Here you’ll find information about the Wisconsin 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
Wisconsin’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 Wisconsin’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 Wisconsin’s Motor Vehicle Exemption
In Wisconsin, you can exempt up to $4,000 in equity in your car or other vehicle. You can also use up to $12,000 of any amount of the general personal property exemption you have not yet used.
The Federal Motor Vehicle Exemption
Wisconsin allows you to choose between the state exemptions or the federal bankruptcy exemptions. If you decide to use the federal bankruptcy exemptions, you can exempt up to $3,450 of equity in your car.
Using Wisconsin’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 the general personal property exemption Wisconsin provides. Wisconsin law allows bankruptcy filers to protect up to $12,000 in any personal property, including a motor vehicle. If you do not use the full $12,000 on other property, you can use the rest on your car.
Example. Say your car has $9,000 of equity, you can protect $4,000 of that equity with your motor vehicle exemption, leaving $5,000 unprotected. If your other personal property, such as books, furniture, jewelry, pets and firearms, is worth $7,000, you can protect that property with your $12,000 personal property exemption. The $5,000 difference can be used to cover the rest of your motor vehicle equity.
Can Married Couples Double Wisconsin’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Wisconsin allows married couples to double the motor vehicle exemption, providing an exemption of $8,000 for vehicles they own jointly.
(To learn about the advantages and disadvantages of joint bankruptcy filings, see Nolo's section on Bankruptcy Options for Married Couples).
What Vehicles and Insurance Are Covered by the Motor Vehicle Exemption?
Wisconsin's motor vehicle exemption law applies to motor vehicles only.
Checking Wisconsin’s Exemption Laws
You can find Wisconsin’s motor vehicle exemption at Wis. Stat. Ann. 815.18(3)(d).
You can find the Wisconsin statutes on the website of the Wisconsin State Legislature at https://docs.legis.wisconsin.gov. To learn how to find state statutes, see Nolo’s Laws and Legal Research area.
When the Wisconsin Exemption Amounts Are Updated
The exemption laws in Wisconsin change periodically. Check the Wisconsin State Legislature website at https://docs.legis.wisconsin.gov for updated amounts.