Can I sell my car before a judgment is granted and a lien placed on it?

Asked about 3 years ago - Orange, CA

I plan on filing for BK at the end of this year and my $7K car would be exempt. (Wildcard exemption in CA).

However, I believe that if I received a judgment and lien before I file, I could lose my car. So I was wondering if I would be able to sell my car during a lawsuit. Would it be fine as long as I sold it before a judgment was issued against me?

Would this be okay with my BK as long as I sell my car for a reasonable price? I understand that selling my car for much less or giving it away is a red flag prior to BK's.

Do I have any other options to protect my car so I don't have to sell it? I really would like to keep my car but exemption is only $2,550 in CA.

Thank you in advance.

Attorney answers (2)

  1. Dorothy G Bunce


    Contributor Level 20


    Best Answer
    chosen by asker

    Answered . As long as you don't sell your car to someone who is a family member or a friend, you shouldn't get into any kind of trouble selling your vehicle.

    Of course, you could also always borrow money against the vehicle, especially if it needs repairs or you need help to make the insurance payment.

    But it really sounds like you should file bankruptcy sooner rather than later & avoid this problem altogether. Are you not currently eligible to file bankruptcy?

    Hope this perspective helps!

  2. Mitchell Paul Goldstein

    Contributor Level 20

    Answered . Exemptions usually protect your property from everyone except the creditor who loaned you the money to purchase the thing you are exempting. Talk to a local consumer law attorney about being able to protect your car from judgment liens.

    If you really need the money, as long as you sell it for fair market value, there is no issue.

    Mr. Goldstein is a Virginia-licensed attorney only. The information is not, nor is it intended to be, legal advice.... more

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