Surrendering Vehicle in Bankruptcy

[bkchap7filer]

Well...I had a house one time that sat empty for over a year because it wouldn't sell. The insurance company found out about it and dropped my insurance. You wouldn't believe how impossible it is to find an insurance company willing to insure an empty house. So, I didn't have insurance. Of course, my mortgage agreement said that if I didn't have homeowners insurance they would add it for me....but they never did! I finally sold it 6 months later (at a loss) and they never did add insurance.

So, don't know if your car would be different than my house but they may or may not catch it

[StartingOver08]

i was wondering about dropping the coverage on two cars we're not keeping... we haven't filed yet; but bought a cheaper car already. I'm driving one of the cars- since i commute. But the other one is literally just sitting in our driveway. Since we won't be filing until May, and I haven't missed a payment yet; I was keeping insurance on both- i didn't know what would happen if i dropped coverage. They both have loans on the them - and in the loan paperwork it basically says that if you don't have full coverage; they'll add it for you. Has anyone had that happen? Do they just add it to the car payment? Obviously if i don't plan on making the car payment - that's not a huge deal. It would really save us money if we could drop the insurance on at least one of them. Advice?

When your insurance gets canceled either by you or the insurance company, the insurance company notifies the lender. If you are not using the car and plan on surrendering in the BK then this is pre-petition debt and is discharable. Usually they do notice your insurance has lapsed, especially on vehicles. Bkchap7filer was just lucky! If they add force pay insurance to your payment, it is just more to discharge and is probably another reason for the lender to declare a default. Since you are filing, you will include all in the petition. My answer would be to drop the insurance ONLY on the vehicle you do not drive (the one sitting in the driveway that NO ONE drives).

[dogbone33]

You need to think if you cause an accident, you still need to pay liability. I will keep my insurance until they take my car.

[lookingforward]

We did not make the Sept 14 payment on our car. They filed the legal paperwork to have our car seized by the sheriff's department exactly five months after the last payment, on Jan 14. No other contact, just the
sheriff showing up with the writ of seizure and sale on Jan 17.

I kept the insurance on it, I was paranoid that something would happen.
Looking back, I wish that I'd turned in the plates and dropped the insurance.
I could have used the extra money. Even if your insurance company notifies
the lender, what can they do?

I did drop the insurance the first business day after they took it.

[jribe]

yeah, i've just been worried about something happening to the car if i dropped the insurance. But we don't drive it at all; and it's just in the driveway. Even if someone hit it, i wouldn't claim anything on my insurance anyway... I guess i'm just looking for reassurance! lol. Thanks for the input! (and i'll definitley keep insurance on the one we drive)