Can a Judgment Creditor Take my Car?

George Simons | January 05, 2024

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: A judgment creditor can take your car. If you've been sued, use SoloSuit to respond in 15 minutes and protect your precious car.

Can a Judgment Creditor Take Your Car?

Summary: Losing in court is scary, particularly when you are afraid that a judgment creditor may try to take your car. Luckily for debtors, all states have legal exemptions that protect a portion of a car's value from the judgment creditor. If your vehicle's value falls below the exemption amount, it is safe from the judgment creditor.

Yes, a Judgment Creditor Can Take Your Car?

Judgments are court orders requiring you to pay the plaintiff money. Whether you lost a lawsuit because you did not know how to answer a summons for a debt collection lawsuit or legitimately owed the debt, once a plaintiff gets a judgment against you, they can take steps to sell your property get their money. Cars are personal property, and that means that judgment creditors can typically take and sell them.

While cars may be personal property, they are also really important for daily life. Vehicles help us get to work, feed our families, and get kids to doctor's appointments. Courts recognize that taking a family's only means of reliable transportation could create a severe problem that could result in unemployment or other hardships. Luckily for debtors, every state recognizes that some types of personal property, like your car, are crucial to daily life that losing them would have terrible effects for you and your family.

State laws protect these critical pieces of personal property through “exemptions.” Judgment creditors cannot take things protected by exemptions. Some property, like reasonably necessary clothing or burial plots, is totally exempt. Creditors cannot take the exempt property to pay down your judgment debt. Other property, like your car, has a certain amount of its value protected from creditors.

It is essential to understand that the exemption protects your equity in the car. The equity you have is the difference between what you owe on the vehicle's loan and its market value. Knowing what the car is worth when you lost your lawsuit, and the amount of your state's auto exemption are crucial bits of information that you need to know to determine if your state's exemption shields your car.

Keep in mind that no matter what your car is worth and how high your state's exemption, if you do not make your car or lease payment, the lender can take your vehicle.

Your Car Can Be Seized Even If You Own It Fully

Whether a judgment creditor can take your car depends on how much the car is worth. Because you do not owe anything on the vehicle, your equity equals the car's value. Whenever the vehicle's value is lower than your state's automobile exemption, a creditor probably cannot take it. If it is worth more than the automobile exemption, a judgment creditor can take the car and sell it. They will need to refund you the value of your state's exemption and can use the rest to pay down your debt.

To understand how this would play out in real life, assume that you are in Colorado and can claim a $7,500 motor vehicle exemption. Your vehicle is owned free-and-clear and is worth $20,000. A judgment creditor could sell your car and would need to refund you $7,500 while applying $12,500 towards the judgment.

What if I Owe Money on My Car?

Let's be real for a minute - most people who have a car also have a car payment. Whether you owe more than what your car is worth because you paid a high-interest rate, did not put much money down, or were involved in an accident, judgment creditors are probably not going to take your vehicle from you. You have no equity in the car, so you have less equity than whatever your state's exemption is. That is a losing proposition for judgment creditors!

Things can get dicey if you have a bit of equity in your car. This is where knowing what your state's personal property exemption comes into play. Assume that you owed $6,000 on a car that was worth $12,500 in Massachusetts. The auto exemption in that state is $7,500. Because the exemption is worth more than your equity in the car ($6,500), the creditor is probably not going to seize it.

What if I lease my car?

A leased car typically cannot be seized to pay off your judgment because you do not own the vehicle. Lessees rent leased vehicles from the lessor, so unless you start missing lease payments, the car will probably stay in your driveway.

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Debt collector guides

Are you being contacted by a debt collector? We’re making guides on how to resolve debt with each one.

Arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Bankruptcy

Bankruptcy is a great way to legally resolve debt, but it's usually best to consider it as a last resort. Here are some bankruptcy guides to help you decide which debt resolution option is best for you.

Check your case status

Don’t have time to go to your local courthouse to check the status of your case? We’ve created state guides on how to check the status of your case throughout the US, complete with online search tools and court directories.

Credit

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt, along with other credit-related resources.

Debt collection FAQs

Find answers to some of our the most commonly-asked questions about debt collection below.

Debt collection documents and templates

If you're dealing with debt, these documents and templates will help you respond, protect your rights, negotiate, and resolve your debts.

Debt relief

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt settlement

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created state guides on debt settlement. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

Eviction

Facing an eviction? The following guides will help you navigate your situation with confidence.

Federal debt collection laws

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Legal aid

Helping people find access to justice is at the heart of Solo's misison. If you're dealing with a legal debt issue, the following guides will help you through it.

Medical debt

Having a health challenge is stressful, but dealing with medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Personal finance

Learn how to manage your finances and overcome crushing debt. Check out our personal finance guides below.

State debt collection laws

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote guides on each state’s statutes and more.

Stop collection calls

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Wage garnishment

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in your state, plus other wage garnishment resources.

The Debt Hotline

Hosted by Team Solo, The Debt Hotline breaks down debt and personal finance topics with help from attorneys, financial experts, and industry pros. We respond to real questions to help you navigate debt with knowledge and courage.

Other debt resources



It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.


"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather



Get Started

Contents

Affordable Legal Help
Trustpilot

Respond to Your Debt Lawsuit

Get your professionally reviewed Answer in minutes. No expensive lawyers needed.

loading...
Get My Answer
Affordable Legal Help
Trustpilot

Respond to Your Debt Lawsuit

Get your professionally reviewed Answer in minutes. No expensive lawyers needed.

loading...
Get My Answer
loading...
Get My Answer