Yes, a creditor can take your car in Florida to pay certain delinquent debts, even if you own the title to the vehicle free and clear.
This process is called levy in aid of execution and is carried out by the Sheriff’s Office at the request of a judgment creditor.
However, whether a creditor can take your car depends on how much the car is worth. If the car’s value is lower than your state’s automobile exemption, a creditor probably cannot take it.
In Florida, the debtor is entitled to a $1,000 motor vehicle exemption.
If the car is worth more than the automobile exemption, a judgment creditor can take the car and sell it, but they will need to refund you the value of your state’s exemption and can use the rest to pay down your debt.
It is important to note that there are legal exemptions that protect a portion of a car’s value from the judgment creditor in all states, including Florida.
What Is The Process Of Levy In Aid Of Execution And How Does It Work In Florida?
The process of levy in aid of execution is a collection remedy used to force the sale of a debtor’s tangible personal and real property.
It is used to seize real estate, stock in corporations, and the debtor’s personal property.
The process involves obtaining a Writ of Execution, which is a court order that allows the judgment creditor to collect on the judgment.
The writ of execution lets the creditor request the sheriff levy on any property owned by the judgment debtor.
In Florida, the process of levy in aid of execution involves the following steps:
- Obtain a judgment lien by recording a Judgment Lien Certificate.
- Obtain a Writ of Execution, which is a court order to command a Sheriff to enforce a judgment by levying on real or personal property of the judgment debtor.
- Provide the Sheriff with the original (certified) Writ of Execution issued by the Court of record and two copies.
- Provide the Sheriff with a copy of the judgment.
- Provide the Sheriff with a check for the Sheriff’s fee.
- Provide the Sheriff with a Levy Information Sheet.
- Provide the Sheriff with a Levy Packet, which includes a Notice of Levy, a Claim of Exemption, and a Motion to Dissolve the Levy.
Once the Sheriff receives the necessary documents and fees, they will proceed with the levy on the debtor’s property.
If the debtor has no property to levy, the Sheriff will return the Writ of Execution to the creditor.
How Can I Determine The Value Of My Car In Florida To Assess Whether It Can Be Taken By A Creditor?
To determine the value of your car in Florida, you can use resources such as Kelley Blue Book or NADA Guides.
However, it is important to note that creditors will only take a vehicle if it 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.
In Florida, you can claim an exemption of up to $1,000 of the value of your vehicle under Florida law.
This means that your vehicle cannot be taken to satisfy a judgment unless the value of the car, less all debts for which the vehicle is collateral, is greater than $1,000.
If a judgment creditor or sheriff takes your vehicle under an execution and its value to you is less than the value that you claimed as exempt, you can apply to the court for recognition of your exemption and request the return of your vehicle.
Additionally, debtors are entitled to a personal property exemption, up to a certain amount, which offsets the value of a vehicle as well.
The Florida Constitution gives you the right to exempt up to $1,000 in personal property per person from confiscation by a creditor.
The Florida Statutes allow you to claim $4,000 more per person in personal property as long as you do not make a homestead claim as described above.
Unless the judgment creditor has a lien or security interest in the property, you can protect up to $5,000 per person worth of your property from execution or attachment.
Are There Any Other Exemptions Or Protections In Florida Law That Can Prevent A Creditor From Taking My Car?
Florida law provides several exemptions and protections that can prevent a creditor from taking your car.
Here are some of the most important ones:
- Motor vehicle exemption: Your vehicle is exempt up to $1,000 in value, meaning that it cannot be taken to satisfy a judgment unless the value of the car, less the amount of any liens or encumbrances, exceeds $1,000.
- Homestead exemption: The most important exemption from creditors in Florida is the homestead exemption, which protects your primary residence from being taken by creditors.
- Miscellaneous statutory exemptions: Florida statutes provide several miscellaneous creditor exemptions, such as professionally prescribed health aids, hurricane savings accounts (with restrictions), medical savings accounts, veterans’ benefits, and unemployment benefits.
- Wage exemption: The wages and earnings of a bankruptcy debtor who is head of household are exempt under Florida law.
- Retirement account exemption: The bankruptcy debtor’s IRA, 401k, pension, and similar retirement accounts are exempt from creditors.
It is important to note that these exemptions are available only to people who permanently reside in Florida.
Additionally, if the value of your vehicle exceeds $1,000, minus all debts that have the vehicle as collateral, creditors may claim it to pay off your debts.
Federal law exempts certain types of property, but also permits states to opt out of federal exemptions and instead establish state exemptions.
If A Creditor Takes My Car In Florida, What Happens If The Car’s Value Is Less Than The State’s Automobile Exemption?
If a creditor takes your car in Florida, and the car’s value is less than the state’s automobile exemption, the following may happen:
- The creditor may sell the car to recover the debt owed to them.
- If the car’s value is less than the state’s automobile exemption, the debtor may be entitled to keep the car.
- If the debtor files for bankruptcy, an automatic stay goes into effect, which stops all collection activity against them, including car repossession.
- The debtor may also consider voluntary car repossession, which means returning the car to the creditor to reduce their expenses in repossessing the car and reducing the amount of money owed to the creditor.
It is important to note that the creditor has the legal right to seize the vehicle when the borrower has defaulted on the loan, and the vehicle may be repossessed at any time without notice.
However, the creditor is banned from using actual, physical force or a threat of force to seize the car.
If a borrower is at risk of car repossession, they should contact a bankruptcy attorney for legal advice without delay.
Can A Creditor Take My Car In Florida If I Still Owe Money On A Loan Or If It Is Leased?
Yes, a creditor can take your car in Florida if you still owe money on a loan or if it is leased.
Once you default on your loan, your creditor has legal authority to seize your car at any time without prior notice and may come onto your property to do so.
The creditor can take the car back and sell it to recoup their loss.
Car loan contracts permit a car repossession after one missed loan payment, and a car loan is a secured loan, which means that the lender can repossess the car if the borrower defaults.
However, state law does place limits on how the creditor may repossess a vehicle and resell it to reduce or eliminate the debt.
If the unpaid balance at the time of default is less than $2,000, the lender cannot go after the borrower for a deficiency.
If you are at risk of losing your vehicle to repossession, you can contact a bankruptcy attorney for legal advice to stop the repossession process.