Can I Keep My Car if I File Chapter 7 in Maryland?

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In most Chapter 7 cases in Maryland, yes, you can keep your car. What matters is how much equity you have in it and whether you stay current on any car loan. For everyday vehicles with modest equity, most filers keep their car without a problem.

A lot of people put off filing because they are afraid of losing the car they need to get to work. In the large majority of consumer cases, that fear does not match what actually happens. Here is how it works.

It comes down to equity

Equity is what your car is worth minus what you still owe on it. If you own the car outright, the equity is its full value. If you have a loan, the equity is only the part you have paid down. The lower your equity, the easier it is to protect.

How Maryland protects your car

Maryland does not have a separate motor vehicle exemption. Instead, you protect a car using Maryland's wildcard exemption, which can be applied to any property you choose, including your vehicle. As long as your car's equity fits within the wildcard amount available to you, the trustee cannot take it. We calculate this for you before you file.

If you still owe on a car loan

If you are making payments and want to keep the car, you generally keep paying the lender and stay current. Many clients simply continue their loan as usual. We will walk you through your options, including reaffirming the loan, so you can decide what is best.

When a car could be at risk

A car is only at risk when it has more equity than the wildcard exemption can cover, for example a paid off vehicle worth well above the protected amount. Even then there are often ways to plan around it, including filing Chapter 13. We look at this with you before you file, so there are no surprises.

How we protect your car

At Middleton Legal we review your vehicle's value and equity up front and apply the right exemptions so you keep what matters. We help clients across Maryland and Florida. For a free consultation, call 240-896-3253.

This article is general information and not legal advice. For advice about your situation, speak with a licensed attorney.