Not much time...Info needed..Pls Help

[prmirage]

I'll try and keep this as short as possible. I hope someone with the necessary knowledge will read this soon as time is of the essence.

As a result of a failed business, we have lost our home and are crushed under a multitude of debt. We have relocated to Las Vegas, NV to live with family and I have found a job. However, my present income is insufficient, even under controlled payments, to ever get us out of our debt, let alone allow us to move out on our own. As reluctant as I am, I have decided to claim BK.

As if the loss of our business wasn't enough, the night before we were to move here, a cousin was out to assist and was driving our only family vehicle to the local store and was involved in a vehicle collision in which ours was totalled. Since we were so very broke, we didn't not have vehicle insurance (stupid yes we know). Since then, we have received our payout from the other drivers insurance company (he was at fault). Here in lies our question...

We have this money, which is enough to purchase a decent vehicle here in Vegas, however, I still have the loan company to contend with. Given that I had already decided to claim BK, I am tempted to include the vehicle loan as well. My concern is that there is no vehicle for the loan company to reposess if I do.

Would it be considered fraud, therefore against the law, to keep the money and purchase a new vehicle and include the loan company in a BK given that there is not a vehicle to recover?

We are desperate and could put this money to good use. I hope that someone with the knowledge can help us with information. Thank you in advance...

[HeatherB]

Not sure if I can really answer the question. I also had a vehicle that was totalled that I was paying the trustee for. I actually think I was supposed to have insurance on it, but let it lapse. My case has been discharged and closed and I have not heard anything from the lender or trustee about the car. (It's sitting in a lot collecting "storage" fees) BUT- My car was not worth a whole lot. It was a 98 mitsubishi.

I did NOT receive any money from the accident, though.

Was it your only vehicle??

Honestly, I would talk with a lawyer about it (free consultations). They might be more apt to know what the trustee where you live is like and some are much more linient than others.

[familyof7]

You could get in trouble if the loan company finds out . We had a similar situation we kept the money and told the lien holder it was disabled and if they wanted it come and get it we said it is on the side of the road and a tow company might pick it up if you dont hurry. Well they didnt bother and the debt was discharged. We got a letter in the mail 1 yr after it was totaled and it said that the junk yard was going to get a salvage title if we dont want the car if we want it we owe x amt for storage. We of course did not want it but the letter was also sent to the lien holder but it did not say it was wrecked or if it was just broken down but the car wasnt worth the amt they wanted for storage so of course the lien holder didnt want to get the car.

[Bandit]

You could get in trouble if the loan company finds out . We had a similar situation we kept the money and told the lien holder it was disabled and if they wanted it come and get it we said it is on the side of the road and a tow company might pick it up if you dont hurry. Well they didnt bother and the debt was discharged. .

Would it be ok to use a small portion of the money to get a car if they don't have one at all? Even if it was just a little one to get around in and say keep the price/exempt under what is allowed in Vegas instead of keeping the cash or sending the whole amount to the other loan for the crashed car?
That is of course if the exemption is more than 700 and send the rest to the loan?

I am not saying that it IS better, but to go into BK with no car at all would really mess up getting around for awhile and it seems it might be hard to get one after the BK.
What do you think?

[familyof7]

Would it be ok to use a small portion of the money to get a car if they don't have one at all? Even if it was just a little one to get around in and say keep the price/exempt under what is allowed in Vegas instead of keeping the cash or sending the whole amount to the other loan for the crashed car?
That is of course if the exemption is more than 700 and send the rest to the loan?

I am not saying that it IS better, but to go into BK with no car at all would really mess up getting around for awhile and it seems it might be hard to get one after the BK.
What do you think?

I would buy a car and send the rest to the car company that way you can say I just replaced my car and used the rest for the lein. No intention of fraud. I think if you bought a car and had money left over and blew it it would be a different story. And then file bk and discharge the debt. Of course I am not an attorney but my personal opinion and experience is where my advice comes from.

[prmirage]

You could get in trouble if the loan company finds out . We had a similar situation we kept the money and told the lien holder it was disabled and if they wanted it come and get it we said it is on the side of the road and a tow company might pick it up if you dont hurry. Well they didnt bother and the debt was discharged. We got a letter in the mail 1 yr after it was totaled and it said that the junk yard was going to get a salvage title if we dont want the car if we want it we owe x amt for storage. We of course did not want it but the letter was also sent to the lien holder but it did not say it was wrecked or if it was just broken down but the car wasnt worth the amt they wanted for storage so of course the lien holder didnt want to get the car.

The tow company and their charges are another matter altogether. One, given all our other problems, I really don't care about at this point. While I understand their position, they are not willing to work with us on any level anyway so as far as I'm concerned, they can eat the cost of the towing and storage. We might be lucky anyway since we do not have a contract with them nor do did we authorize the towing so no signatures were ever exchanged. They were called by the local PD at the time to clear the road for traffic. My cousin was driving anyway.

We are a family of 6 with two car seats so an SUV is what we desire. I know beggars can't be choosers but anything short of an SUV would be pointless. So, we would need most if not all of the payout to get into an accomodating vehicle.

Thanks for all your input so far. Hopefully a BK attorney will read this thread soon. I get paid by the hour and just started with my current employer so I'm hoping to get an answer without having to take time off to go see one in person.

[JollyGG]

Thanks for all your input so far. Hopefully a BK attorney will read this thread soon. I get paid by the hour and just started with my current employer so I'm hoping to get an answer without having to take time off to go see one in person.

As far as I am aware there is no one on this forum who admits to being an attorney. Sorry. We are all just people who have been through the process and through this board have heard other experiences with the process.
Have you retained or picked out a lawyer for your bankrupty. You are going to need to find the time to interview three or four and get a feel of your situtation. It seems that this is one question to keep on your list for your initial free consulations.

[lrprn]

Hopefully a BK attorney will read this thread soon. I get paid by the hour and just started with my current employer so I'm hoping to get an answer without having to take time off to go see one in person.

There are no bankruptcy lawyers here - only knowledgeable filers who've learned what we know through a lot of research and listening to hundreds of people tell their personal stories.

This is an unusual situation - you MUST have real legal advice from experienced bankruptcy lawyers who are famlliar with how the courts in your area will interpret this situation to handle it properly. I understand your new job and being reluctant to take time away. However, speaking to several bk lawyers in the coming weeks is also very important if you are already swirling the drain financially and could make things worse by doing something that will hurt your filing. Make appointments for free consultations with 3-4 bankruptcy laywers in your area - try to schedule them for the same day if possible to minimize the hit at work. You'll be glad you did.

[CindyLou]

First of all, welcome.

Let me ask you a question. Was the money you received from the insurance company a settlement for personal injury or an actual reimbursement for your car damages? Usually the car replacement check is made out to the lien holder so I am surprised they gave you the money. That must have been a mistake. My next question would be if the finance company every really propery filed the lien against the car? Something just doesn't sound right here. Tell us a little more about how this money came about. I'm not saying you did anything wrong. This is just not usually how this works. Normally the check would have gone directly to the finance company and you would have gotten anything left over. Now any portion of a personal injury settlement would have gone directly to you. And believe me, insurance companies have been know to settle with you without an attorney. It happened to me. Someone hit me from behind and the insurance company called and offered me a checked for $5000 to settle immediately. I wasn't even injured. So of course I took it. Who wouldn't!! Then in addition they paid to have my car repaired. They paid that money directly to the auto shop, but it was completely seperate.

What did the check stub say? What did the enclosed letter say?

[Bandit]

Usually the car replacement check is made out to the lien holder so I am surprised they gave you the money. That must have been a mistake.

I was in an accident one time where someone hit my car and I still owed on it and the other insurance company from the guy at fault wrote me a check instead of giving it to the bank. I cannot remember all the details but they wrote it to me right on the spot the same day the adjuster looked at it and took pictures.
My car was not totalled though with no personal injury and I was able to get the body work done and keep on making payments.
I can't say for sure but I wonder if there are just different policies with different insurance companies?

Of course there was no recourse of a BK to think about for me.

[Bandit]

I would buy a car and send the rest to the car company that way you can say I just replaced my car and used the rest for the lein. No intention of fraud. I think if you bought a car and had money left over and blew it it would be a different story. And then file bk and discharge the debt. Of course I am not an attorney but my personal opinion and experience is where my advice comes from.

Yah. It is a tough one but hopefully that will be an option. It is what I would do as well and like you say, I am also no attorney. At least I would be able to explain and prove what I did with the check without blowing it, risking problems later and having no way to show what I did with it.

I just remember walking one year for almost 6 months to get to three different jobs in the dead of winter with blizzards and -30 windchill factors. That was a time I will never forget because it was so hard, trying to save to get a car.

[Bandit]

We are a family of 6 with two car seats so an SUV is what we desire. I know beggars can't be choosers but anything short of an SUV would be pointless. So, we would need most if not all of the payout to get into an accomodating vehicle.

I found this info for you for Nevada:

Motor Vehicle Exemption
Your Nevada bankruptcy attorneys can use this exemption to protect $1,500 per debtor in value of any one motor vehicle listed in your bankruptcy. Additionally, your vehicle is 100% exempt if it is equipped for a disability you have.

Double check those amounts. This is important to know. I don't know what kind of SUV you can get but be careful spending (if you do) because you might end up right back in the same situation concerning the vehicle part, or paying more than you bargained for.
I picked up a decent Crown Vic police interceptor for 1,200 and drove it for four years with very few problems. The one I got was only four years old, so that was a steal. That would accomodate 4 adults and two baby seats. I am not saying to not get what you feel is best for you and your family but I personally would consider the exemption.

This is the first time I noticed a 100% exemption on a car for being equipped for disability. I felt that was very considerate though it may not apply to your family.

We have relocated to Las Vegas, NV to live with family and I have found a job.

How long you have been there is another factor to consider and get info about unless you are going to use your old state, then get info for that state.
Patience and time are important factors as well.

I don't know all the answers, prmirage. Just looking at things from different perspectives and, as if it were me and my family.

[Run]

An interesting aside,

If the bank you took out a loan from for the totaled car claimed ownership (such that the insurance check went to them) they would be responsible for the insurance premium (or registration...etc...) and you would never have to pay for insurance until the car was paid off. That's the reason that the banks don't close this loophole.

That means that the totaled car is theirs and the insurance check is yours since you are the owner of the vehicle (though with a lien).

It is a gamble that they make (that they will make more money not having to pay for the car to be insured, licensed etc... by claiming that you are the owner, vs. them owning it and being responsible for all fees).

Otherwise you would be "renting to own," only paying the one rental fee.

I say the money is yours to do with as you please, but do consult competent legal advice!

[prmirage]

All good advice thank you and excellent suggestions.

I am definately hoping that RUN is correct about the money being ours. To answer another question, the funds were for vehicle damages not injury. Amazingly enough, nobody was injured considering both vehicles were totaled.

I was also surprised that the insurance company paid me directly as well. Although, they all do operate differently.

Consulting an attorney is my next step so for those who are interested I will post his professional opinion here in the coming week. {fingers crossed}

[GoingDown]

An interesting aside,

If the bank you took out a loan from for the totaled car claimed ownership (such that the insurance check went to them) they would be responsible for the insurance premium (or registration...etc...) and you would never have to pay for insurance until the car was paid off. That's the reason that the banks don't close this loophole.

That means that the totaled car is theirs and the insurance check is yours since you are the owner of the vehicle (though with a lien).

It is a gamble that they make (that they will make more money not having to pay for the car to be insured, licensed etc... by claiming that you are the owner, vs. them owning it and being responsible for all fees).

Otherwise you would be "renting to own," only paying the one rental fee.

I say the money is yours to do with as you please, but do consult competent legal advice!

Yep, that's right. Let them know where the totalled car is. If they want it, they can repossess it. That is the end of your responsibility in this matter. The insurance money came from the other driver of the other vehicle, not from your own insurance policy (which lapsed), so the lienholder is not entitled to it.