I recently totaled my car and my insurance lapsed. Therefore my ins company with not cover the car. Can I file for Chapter 7 banruptcy to get the loan discharged?
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It may not be able to be discharged. If your loan papers stated that you had to keep insurance on the vehicle then the loan company may object. After all, they can't come reposses the car (their collateral) to try and recoup some of their losses. I would think the big question for the loan company would be, how much was owed? If it was only a couple of thousand dollars it may not be worth it for them to object to this debt being discharged. If it's for a large chunk of money it may be worth their effort.Originally posted by kthgff View Post
Edited to add: If this is your only debt it would probably be better for you to work out a settlement with them. Bankruptcy is something that will stay with for a long time.Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions. -
No, its not my only debt, just the one I am most concerned about.Comment
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I am probably going to file for bk. I make 400 below the median for my state, think I will have any problems? Also should i quit making my car payment? I am already a month behind.Comment
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You need to speak with a bk attorney sooner rather than later.Originally posted by kthgff View Post
A lot will depend on how your state law that mandates auto insurance is worded.
Many states that have mandaory insurance laws-not having insurance is like a minor traffic violation. No criminal penalties.
Other states are more strict. You can't discharge debts that are the result of a criminal act or fraud. Not trying to scare you but you just need to know exactly what your state law says.Comment
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