Can I Keep My Motorcycle?

Treatment of motorcycles in bankruptcy is very similar to that of a car or truck.  In order to keep your motorcycle, the value of your motorcycle must not exceed the amount of assets you are entitled to keep under your applicable exemptions.  Motorcycles are covered by the motor vehicle exemption. If your motorcycle or street bike is covered by your bankruptcy motor vehicle exemption, then you can keep your bike or motorcycle when you have to file bankruptcy to get out of debt San Diego.

Can I Keep My Motorcycle In Bankruptcy in San Diego?

Your exemptions, both under California bankruptcy law and under Federal law, do not have an exemption that specifically applies to a “motorcycle.”  The only related exemption is the “motor vehicle” exemption.  The bankruptcy exemptions do not state whether the vehicle exemption includes a motorcycle.  To find the answer to whether a motorcycle is a motor vehicle and hence covered by the motor vehicle exemption, you and your attorney will have to look elsewhere.  You will have to look to the applicable law concerning the two different types of exemptions.  To explain your exemption is determined, first I will review the California exemption laws, and next I will review the Federal exemption laws.

Keep Bike Under California Exemption

The California exemption for motor vehicles allows an exemption for the aggregate equity in “motor vehicles.”  The only California law providing guidance on this issue is the California Vehicle Code.  Under California Vehicle Code Section 400, a motorcycle is a motor vehicle.  Specifically, a motorcycle is defined as a motor vehicle  having a seat or saddle for the use of the rider, designed to travel on not more than three wheels in contact with the ground.  Therefore, under California statutory law, a motorcycle is a motor vehicle, and a motorcycle is therefore a motor vehicle for purposes of the California exemption concerning motor vehicles.  So if you are utilizing the California exemptions, the question of whether your motorcycle is determined under California state law.

Keep Bike Under Federal Exemption

The Federal exemptions, both the California Federal-like exemptions (which for the most part mirrors the Federal exemptions) and the Federal bankruptcy exemptions, also do not specify whether a motorcycle is a motor vehicle.  However, the purpose of the exemption is clearly stated in Federal decisional law.  The purpose of the exemption is to provide an exemption for your means of transportation, so if a motorcycle is your means of transportation then it qualifies as a motor vehicle for purposes of the bankruptcy exemption.

Means of Transportation (Federal Only)

It is important to be aware that the Federal motor vehicle exemption applies to only one motor vehicle, which is the vehicle (car or motorcycle) that is your means of transportation.   The California exemptions, in contrast, allow you the aggregate equity in motor vehicles up to the exemption amount, which means it is not limited to one vehicle that you use as your means of transportation.  So with the California exemptions, you can always apply the exemption to motorcycles, regardless of whether they are your means of transportation.

Keep Motorcycle In Many Cases

If you have one or more motorcycles and are concerned about whether you will be able to keep one or more of your motorcycles when you file bankruptcy, contact a bankruptcy attorney and discuss your situation.  If you are like most bikers, keeping your motorcycle is like an important consideration when your financial circumstances are such that you need to file bankruptcy to get out of debt.  In many cases, your attorney will inform you that your motorcycle is covered by your applicable vehicle exemption and you can keep your motorcycle when you file bankruptcy in San Diego.

Federal Wildcard Exemption

It is important to keep in mind that the foregoing addresses on the claiming of the vehicle exemption to protect a motorcycle.  If your lawyer determines that you may utilize the Federal exemptions (as opposed to the California exemptions), then you may use your "Wildcard" exemption to protect your motorcycle to the extent that the exemption is available under the circumstances of your case.