Can Debt Collectors Take Your Car? What Actually Happens

If you lost a debt lawsuit or ignored a summons, your car may now be at risk. Once a creditor wins a judgment against you, they can take your vehicle to satisfy the debt. But state laws protect a portion of your car's value, and in many cases, that protection covers the entire vehicle.

Your car is probably your second-most valuable asset after your home. For 86% of workers, it's how they get to their job. Losing it could cascade into unemployment, missed childcare, and skipped medical appointments. Courts know this. That's why every state shields at least some of a vehicle's equity from creditors.

The question is whether your car's value exceeds that shield.

How Judgment Creditors Seize Vehicles

When a creditor wins a judgment, the court issues an order: you owe X dollars. If you don't pay voluntarily, the creditor can force collection through your property. That includes your car.

The process varies by state, but typically the creditor files a writ of execution with the sheriff's office. A deputy physically seizes the vehicle, often from your driveway or workplace parking lot. The car is then auctioned. From the sale proceeds, the creditor recovers their judgment amount, plus fees and interest. You get the remainder, if any.

Most creditors won't bother with this if your car's value barely exceeds what you owe on it. Auctions usually bring 60-70% of private sale prices, and they still have to pay you your exemption. If the math doesn't work in their favor, they'll pursue wage garnishment or bank levies instead.

State Exemptions Protect Your Car's Equity

Every state provides an automobile exemption. This is a dollar amount of your car's value that creditors cannot touch. If your vehicle's equity falls below that threshold, it's safe.

Equity means the car's market value minus any loans against it. If your car is worth $12,000 and you owe $8,000, your equity is $4,000. If your state exemption is $5,000, the creditor cannot take the car. There's nothing left for them after paying you the protected amount.

If your car is worth $15,000 and you own it outright, that's $15,000 in equity. If your state exemption is $7,500, a creditor could seize it, sell it, pay you $7,500, and keep the rest toward your debt.

State-by-State Exemption Amounts (2025)

Here are exemptions for common states:

• California: $3,325 under System 1; $6,000 under System 2 (you pick one set of exemptions when filing)
• Texas: One vehicle per licensed driver, no dollar limit
• Florida: $1,000 (or unlimited if the vehicle is your primary asset after homestead)
• New York: $4,825
• Illinois: $2,400
• Ohio: $4,450
• Pennsylvania: $8,425
• North Carolina: $3,500
• Georgia: $5,000
• Arizona: $6,000 (or $12,000 if disabled)

These amounts change every few years to adjust for inflation. Some states also allow married couples to double the exemption if they co-own the vehicle.

If you live in Texas, you're covered. A creditor cannot take your car at all, regardless of value. If you're in Florida with an $8,000 paid-off sedan, you're probably fine. But if you're in Illinois with a $10,000 car you own outright, you're vulnerable.

What Happens If You Still Owe on the Car

If you're making monthly payments to a lender, that lender has the first claim on the vehicle. They hold the title. If you miss payments, they can repossess it.

A judgment creditor stands behind that lender. They can only take equity you've built up after the loan balance is paid. If your car is worth $18,000 and you owe $15,000, your equity is $3,000. In most states, that's fully protected.

Judgment creditors rarely bother seizing financed vehicles. The recovery is too small after the lien and exemption are subtracted. They'll go after your bank account or paycheck first.

But if you stop paying your car loan because a garnishment wiped out your checking account, the original lender will repossess the car themselves. The judgment didn't take your car. Your inability to pay the loan did. Once that happens, you lose the vehicle and still owe the deficiency balance if the auction doesn't cover the loan.

How to Protect Your Car Before a Judgment

Once you're sued, you have options. Ignoring the lawsuit guarantees a default judgment. Responding buys you time and leverage.

If the debt is valid, negotiate. Most collectors will settle for 50-70 cents on the dollar. Get it in writing. If they agree to $4,000 on a $7,000 debt and you pay it, the lawsuit ends and your car stays in your driveway.

If you can't afford a settlement, bankruptcy stops all collection. A Chapter 7 filing halts lawsuits immediately. Your car exemption applies here too—if your equity fits within your state's exemption, you keep the vehicle through bankruptcy and walk away from the debt.

If your equity exceeds the exemption, you have two choices: let the trustee sell it and give you your exemption amount, or buy back the excess equity by paying the trustee the non-exempt value. If your car is worth $10,000 in a state with a $4,000 exemption, you can pay the trustee $6,000 and keep it. That sounds rough, but it's often cheaper than letting a judgment creditor seize it later while you still owe the debt.

Chapter 13 bankruptcy lets you keep non-exempt property as long as you pay your creditors at least what they'd get in a liquidation. You make monthly payments over three to five years. Your car stays with you the entire time.

Use our bankruptcy screener to see if filing makes sense for your situation. It takes three minutes and tells you which chapter fits your income and debts.

What to Do If Your Car Is Seized

If a sheriff shows up with a writ of execution, you can't refuse. But you can act fast.

First, confirm the writ is legitimate. Ask to see the paperwork. It should reference the case number, judgment amount, and court that issued it. Scammers occasionally impersonate deputies. Real law enforcement will have proper identification and court documents.

Second, file an exemption claim immediately. In most states, you have 10 to 30 days after seizure to assert your exemption. You file a form with the court explaining that your car's equity is below the protected amount. If you're right, the court orders the vehicle returned.

Miss that deadline and the car gets auctioned. You can still claim your exemption from the proceeds, but you've lost the vehicle.

Third, consider emergency bankruptcy. Filing for Chapter 7 or 13 triggers an automatic stay. All collection actions stop instantly, including vehicle sales. If you file before the auction date, the car comes back to you. Your exemption still applies, and if the equity is protected, you keep it through the bankruptcy process.

This is a nuclear option. Bankruptcy affects your credit for seven to ten years. But if the alternative is losing the car you need to work, it's worth it.

How Creditors Decide Whether to Take Your Car

Creditors run the same math you should. If seizing your car won't net them meaningful money, they won't bother.

Start with market value. Use Kelley Blue Book or Edmunds to get your car's trade-in value. Not private-party. Trade-in. Auctions bring trade-in prices or lower.

Subtract your loan balance. That's your equity.

Subtract your state's exemption. That's what the creditor could recover.

Subtract $500 to $1,500 in auction fees and sheriff costs. What's left is their actual take.

If the judgment is $8,000 and their take is $2,000, they'll probably seize it. If the judgment is $8,000 and their take is $300, they'll garnish your wages instead.

Judgment creditors are businesses. They want the highest return for the least effort. Cars require deputies, tow trucks, storage lots, and auctioneers. Bank accounts and paychecks are automated. If your car isn't a jackpot, it's not their first move.

Can You Sell Your Car Before They Take It?

Once a judgment exists, you can still sell your car. But the proceeds are subject to collection. If you sell it for $10,000 and deposit that in your checking account, the creditor can levy the account and take the money.

Some debtors try selling the car to a family member for $1. Courts see through this. It's called a fraudulent transfer. If you sold an asset for below market value to hide it from creditors, the court can reverse the sale. The buyer has to return the car, and you still owe the judgment. In some states, fraudulent transfers are criminal.

If you need to sell the car for legitimate reasons,trading for a cheaper vehicle, relocating, covering an emergency,document it. Use the money for exempt expenses like rent or medical bills. Keep receipts. Courts allow legitimate transactions. They punish hiding assets.

The Bottom Line

A judgment creditor can take your car, but only if the equity exceeds your state's exemption. If your vehicle is financed or its value is modest, it's probably safe. If you own it outright and it's worth significantly more than your exemption, you're at risk. Respond to lawsuits. Negotiate settlements. File bankruptcy if you're underwater. Once the sheriff shows up, your options narrow fast.