Motor Vehicle 704 Exemption in California Bankruptcy
California Code of Civil Procedure Section 704.010 exempts the aggregate equity in motor vehicles, proceeds from the execution sale of a motor vehicle, or proceeds from loss, damage or destruction of a motor vehicle in the amount of $3,050. Therefore, if you select the 704 California bankruptcy exemption scheme you can exempt up to $3.050 of the aggregate equity in a motor vehicle. Similarly, if you select the 704 exemption scheme in bankruptcy you can exempt up to the same amount for proceeds related to compensation for loss or damage to your motor vehicle. For instance, if you received a check from your insurance company for the loss or destruction of your car, up to $3,050 of that check will be exempt in bankruptcy. However, there is one catch: the proceeds emanating from loss, damage, destruction, or execution sale of the motor vehicle are only exempt for 90 days. Therefore, if you received the same check from your insurance provider 4 months before filing for bankruptcy the check proceeds will not be exempt.
How To Value The Motor Vehicle
Bankruptcy attorneys often say that you should value your property as if you were pricing it for a yard sale. However, this pricing framework will not work for motor vehicles. In bankruptcy motor vehicles should be priced according to their corresponding Kelley Blue Book value with appropriate additions or deductions in value for unique features. For instance, if the KBB value for a 2002 honda civic in good condition is $8,000, the default value assigned to the car in bankruptcy should be $8,000. However, if the vehicle is missing an engine the value should be reduced accordingly and the reason for the reduction in value should be noted on the appropriate bankruptcy schedule. Likewise, if the honda civic has a racing engine the value should be increased accordingly with the reason for the increased value noted in the appropriate schedule.
Help With Bankruptcy Exemptions
Determining whether your cars, house and other personal property is protected in bankruptcy can be difficult. Before filing bankruptcy call a bankruptcy lawyer for a free consultation. Sacramento Law Group LLP represents clients not only in Sacramento, but also simple chapter 7 bankruptcy clients in Stockton to complex chapter 13 bankruptcy clients in Redding. To learn more about filing bankruptcy call Sacramento Law Group LLP at (916) 596-1018.