If you default on a student loan and your car is the only thing you own and you get sued, can they take your car?

UPDATED: Sep 5, 2012

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If you default on a student loan and your car is the only thing you own and you get sued, can they take your car?

It’s worth is 3,500 in the blue book.

Asked on September 5, 2012 under Bankruptcy Law, Tennessee


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Under the laws of all states in this country, a vehicle that is used for personal use by a debtor which is worth less than $8,000 is typically exempt from a judgment levy by a creditor.

As such, if you end up with a judgment against you for a defaulted student loan, your $3,500 vehicle would be normally exempt from levy by the judgment creditor. However, if it is levied upon, you must timely serve and file a claim of exemption as to your $3,500 vehicle with the court. the court clerk will then set a hearing date for you to attend and argue that the car cannot be levied upon.

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