Car accident...with car in Ch13

[gsims3200]

I'm in the middle of a ch13, my car is in the bankrupcy...I had a car accident that was not my fault the other night. My car is most likely going to be totaled....what happens to the money I receive from the Insurance Company? Does the trustees get all of that or am I allowed to keep it? I'm wondering if I should even report this to my attorney at all...but worry that this will be discovered by the trustees that I didn't report the earnings. My girlfriend wants to purchase a car for me and let me take over the payments...I would like to keep the money to put down as a down payment.

Any advice would be helpful. Thanks!

[Jman30]

I was in the SAME situation last December. I had an accident in Dec 19th, 2005 with my car that was not my fault. The car was in the BK.

A few questions for you....how much do you owe on the car?? If the insurance company totals the car, is the amount more than you owe on it?

My intial estimate on my car was to total it. I owed more than the car was worth and what would have happened was I would have gotten a check from the insurance company. At that point, I would have to call my attorney, since who wants to pay for a car that is totaled, right? They would probably have taken the insurance money and applied it towards the BK.
But I took the car and got a different estimate at another garage that was within the amount the insurance company said they would give. So I never even told my attorney. I had the local garage fix it and paid for it with the money I got from the insurance. I figured that was easier than dealing with the courts again.

[gsims3200]

The amount would be more than I owe on the car...I;m not paying Ford Credit anymore, the car payment is mixed into the BK payment I make. I would love to take the Insurance money and let my GF put that down towards another car, I'm afraid that if I report this to my attorney that I'll be giving this money to the trustees. That would be fine, if it would put a dent into my BK payments tho

[Jman30]

I can't say for sure how this work would, but I did it outside of my attorney because I found a mechanic who was willing to work on my car for the right amount. However, from what I remember.....the only way you can do it outside of the getting your lawyer involved is if you get the car fixed. If the car is totaled and can't be fixed, you should contact your lawyer. I believe they will take the insurance money and you will then only be responsible for the difference in the amount on the car loan. It won't reduce your payment, but it may cause you finish a little early.

[gsims3200]

So it would just take away from my total amount owed on the BK...I've been talking to people that I know and some tell me, don't tell anyone just take the money...but I have this guilty feeling about doing that. Like I say, I would love to give the Insurance money to her and put that down on another car....but I also don't want to get in hot water with the trustees if discovered I kept the insurance money without reporting it.

[Jman30]

Well, you could just take the money....but then what? You are paying for a car through your Chapter 13 that you no longer own. You are paying car insurance for a car you no longer own. And you can't cancel the car insurance or Ford will want the vehicle back..only to find it is gone.

When it comes to a BK...always best to play it safe.

[gsims3200]

When you look at it that way, your right I should just play it safe if this car does come up totaled. I really appreciate your input and advice....I feel so green when it comes to this BK stuff that its almost embarrassing. Thanks!

[Jman30]

In my case, it was just a matter of being lucky enough to find a local guy who agreed to fix it for what the insurance company said they would give me for it. I didn't feel like going through attorney again and dealing with the courts....but I was prepared to do that if the car was beyond any hope of repair.

In your case, I would at least call your Attorney and see what he says. That is what you are paying him for...his advice.

And don't worry about asking questions....this board was a lifesaver for me a few years ago when I had questions (and I STILL have them) and like to return the favor when I can.

[SinkingFast]

JMan, as always, has given you some good advice. Definitely run all this by your attny once you know if your car will be totalled.

Also, keep in mind that you could be allowed to take on new debt to purchase a replacement vehicle. The Trustee will have to approve you getting a loan to purchase another vehicle. But if you need a vehicle, then this is something you'll have to think about doing as well.

[Jman30]

Also, keep in mind that you could be allowed to take on new debt to purchase a replacement vehicle. The Trustee will have to approve you getting a loan to purchase another vehicle. But if you need a vehicle, then this is something you'll have to think about doing as well.

Good Point! I forgot about that!! That was one of the other reasons that I searched so hard for someone to fix my car within my budget....I was just so sick and tired of dealing with the lawyer and the Trustee....the thought of applying to get more debt and then going through the whole process and getting it approved, yada yada yada

I've always been a fan of once I was confirmed, the least amount of contact I have with my lawyer or the 13 office, the better I felt.