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Will a Judgment Creditor Take My Car?

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In a Nutshell

The short answer to the question, “Can a judgment creditor take my car?” is “Maybe.” Generally, creditors will only take a vehicle if your car has value.

Written by Attorney Karra Kingston
Updated October 8, 2021

If you have fallen behind on your unsecured debts, credit card bills, or personal loans and creditors or debt collectors have obtained a judgment against you, you may be wondering if those creditors will be able to take your car and sell it to pay off the debts you owe. This article will discuss how a car is treated when a creditor obtains a judgment against you and how to determine whether your car is at risk of being sold by a judgment creditor. 

How Does a Creditor Obtain a Judgment?

Generally, when you fall behind on your credit card debt, your creditor will sell your unsecured debt or secured debt to a collection agency. Typically, the debt collection agency will call you and send you letters in the mail to pressure you to pay the debt. If you continue to ignore these debt collection letters and phone calls, the collection company will probably hire an attorney to pursue a lawsuit against you for the debt that is owed. 

A debt collection lawsuit begins with a summons and complaint. Generally, the summons will provide information about where the lawsuit was filed and how many days you have to answer the lawsuit. If you fail to respond to the complaint, your creditor will receive a default judgment against you. A default judgment is an order entered by the court because you failed to appear or respond to the lawsuit. If a default judgment is entered against you, it means that the plaintiff is awarded an order to collect the amount they demanded in their complaint, subject to certain restrictions. 

If you respond to the complaint with an answer and lose your case, the creditor or debt collector will obtain a court judgment against you. In both a default judgment scenario and a court awarded judgment scenario, your creditor or debt collector will become what is known as a judgment creditor. A judgment creditor is a creditor or debt buyer that has obtained a judgment after proving, in a legal proceeding, that they are owed money for an outstanding debt and are entitled to recover the outstanding debt that is owed to them. 

What Happens After a Creditor Obtains a Judgment?

Once a debt collector obtains a judgment against you, you will receive a notice of the judgment in the mail. The judgment creditor can then use the judgment the court entered to collect the debt that is owed. Judgments generally allow creditors to garnish your wages, place liens on your personal property, real property, and levy your bank accounts:

Wage Garnishment: A wage garnishment order allows a creditor to deduct a certain amount of money from your paycheck until your debt is paid off. Federal law places a limit on how much creditors can deduct from your paychecks. Federal law provides that creditors can only garnish 25% of your disposable earnings or the amount by which your weekly salary exceeds 30 times the minimum wage, whichever is lower. Further, the U.S. Department of Education can garnish up to 15% of your pay if you default on a student loan. Keep in mind, if you owe tax-related debt, the IRS is not required to obtain a court order before garnishing your wages. Further, workers’ compensation payments cannot be garnished by debt collectors, however, there is an exception to this rule if the garnishment order was obtained to enforce payment of overdue alimony or child support, depending on state law. 

Bank Account Levy: A bank levy allows creditors to take money from your bank account. Typically, the creditor will freeze your bank account so you can put money into the account but won’t be able to take it out. The creditors will use that money to pay off the debt. 

Property Liens: Personal property liens attach to real property or personal property so that you can’t sell or get rid of the property until the debt is paid off. The lien gives a creditor a secured interest in your property. If you sell your property, the proceeds will go to the creditor to pay off the lien. In some cases, a lien can allow a creditor to sell your property so that they can get paid. The most common types of property liens are liens placed on real estate. Typically, the creditor will file a copy of the judgment notice with the county in which you own property. The lien will be recorded in a public registry where it will become a matter of public record. Your car could potentially be impacted by a lien.

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Can the Judgment Creditor Take My Car?

The short answer to the question, “Can a judgment creditor take my car?” is “Maybe.” Generally, creditors will only take a vehicle if your car has value. A car with value can be beneficial to a creditor, as they can sell it and use that money to pay off the debt you owe. If a car has little value, creditors won’t go through the trouble. Many cars have very little to no value. Also, most people have car loans on their vehicles which offset any value in their car. A car loan offsets the value of the property and prevents creditors from putting a lien on their vehicles. Similarly, debtors are entitled to a personal property exemption, up to a certain amount, which offsets the value of a vehicle as well.

If your car does have value, a creditor can ask the sheriff to sell the vehicle to pay the debt. However, this is an extremely rare occurrence. Most creditors do not attempt to place a lien on cars or real estate. Generally, garnishments and levies on bank accounts are sought out first by creditors, as they are easier to pursue. 

How Do I Know if I’m Judgment Proof?

If you have no non-exempt assets for a creditor or debt collector to take, then you may be judgment proof. To be judgment proof you must earn income below a certain threshold and have no significant non-exempt assets. If you are judgment proof and a creditor levies your bank account, they will need to return the funds. 

For example, if your sole source of income is social security and your car has no value because there is an outstanding car loan or its value falls within an exemption, you might be judgment proof. Thus, a creditor can get a judgment against you but won’t be able to collect on that judgment.

Even though you may be judgment proof, debt collection agencies may still try to collect the debt they owe. Debt collectors may still continue debt collection activities such as letters and phone calls to recoup the money owed. They simply won’t be able to force you to pay your outstanding debt. With this said, collection activities will still be reported on your credit history and will affect your credit score. Therefore, even if you’re judgment proof, you may want to explore bankruptcy as a potential option.

Can a Bankruptcy Protect My Car?

Individuals who are in debt and worried about their creditors taking their car should consider bankruptcy as a potential solution to their current challenges. Bankruptcy is a powerful tool that can prevent creditors from taking your vehicle. When an individual files bankruptcy, an automatic stay is initiated. The automatic stay prevents creditors from pursuing any collection activity against you. So, even if a creditor has already been awarded a judgment against you, they won’t be able to collect on the judgment once you file for bankruptcy. The automatic stay is one of the most powerful tools in bankruptcy.

When an individual gets a bankruptcy discharge, it means that their discharged debt is eliminated. The bankruptcy discharge operates as an injunction against creditors, which stops them from being able to collect, recover, or offset any debt. Once an individual’s debt is discharged, they no longer owe that debt and creditors may never demand payment of that debt again. 

Please note that a judgment does not reduce to a lien on any property until that judgment is entered. It’s best to file your bankruptcy case before the judgment is entered and that judgment is reduced to a lien. For example, if the creditor has not received a judgment against you and a judgment lien has not been placed on your car, then your car is protected as soon as you file bankruptcy. This means that your car would be treated like any other car in a bankruptcy case, as opposed to one affected by a lien. 

Individuals often assume that when they file for bankruptcy, they will have to give up their cars. This isn’t true. Bankruptcy exemptions allow individuals to file bankruptcy and keep their cars as long as the equity in their car falls under an exemption. For example, if a car is worth $5,000 and you can only exempt up to $3,450 in equity, only a portion of your car’s value will be protected by the exemption. In this scenario, the bankruptcy trustee will determine if the nonexempt equity has enough value that it is worth selling your car to repay your creditors. By contrast, if your vehicle is worth only $2,000, the vehicle is fully exempt and the bankruptcy trustee won’t be able to liquidate the asset to pay off your creditors. 

Individuals who owe money on their cars have to follow the same rules. Outstanding vehicle loans reduce the amount of equity in a vehicle. So, if you have an outstanding loan of $10,000 and the car is worth $12,000, you only have $2000 of equity that needs to be exempted. Individuals should understand that if they plan to keep their vehicle and file bankruptcy, they must pay off the loan per the terms of the agreement. They must also secure the court’s permission to keep paying off that loan via a reaffirmation agreement. 


Most people considering bankruptcy can keep their car safe from a judgment lien by a creditor. It is unlikely that when a person files for bankruptcy a creditor will take their car away. However, individuals who are sued by their creditors should consider filing bankruptcy before a judgment is entered against them, to protect themselves from having their creditors pursue a judgment lien on their vehicle. If you are worried that a creditor may get a judgment lien and you don’t have the money to pay the judgment, you can use Upsolve’s tools to explore affordable bankruptcy as an option or to locate an attorney who can help you assess your situation.      

Written By:

Attorney Karra Kingston


Ms. Kingston began her career as a bankruptcy attorney. She has appeared in front of many federal court judges and has helped numerous debtors obtain a fresh start. Ms. Kingston understands the complex federal rules for discharging debt. While working as a bankruptcy attorney, Ms... read more about Attorney Karra Kingston

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