Totaled car that was not reaffirmed

[laurannm]

Quick question:

My car was discharged as part of a BK7 in 2008 and not reaffirmed, but I was continuing to make payments and have about 10 payments left. I got into an accident and the car was deemed to be totaled. Do I need to call Chase Auto (finance company) and let them know? Or once it's been totaled, I get my check from the auto insurance company and I'm done with it? Wasn't sure how that worked or if the BK factored in at all

Oh,and since there is still a balance due on the car loan, would I even get a check sent to me or does the money get sent directly to the lien holder?

Thanks!

[AngelinaCat]

Let the insurance company handle it. You may or may not get a check.

I cannot say how this will work for you, but you need to let the insurance company know.....

[LadyInTheRed]

No point in calling Chase. Just file the insurance claim and stop making payments on the loan. Assuming Chase has a perfected lien on the car, my guess is that the insurance company will make a check payable jointly to you and Chase and you will have to endorse it over to Chase. If the check is for more than the balance of the loan, you are entitled to the difference.

[laurannm]

Thanks to you both...so I assume too that if the insurance check isn't large enough to cover the balance of the loan, I am still not on the hook for the deficiency because of the discharge?

[BrokeinMD]

I just went through this. My car was not re-affirmed either and totalled with 24 payments to go. My insurance company still dealt with me to negotiate the property damage payment. It took them a little while to get a hold of the Lienholder, however, to get their payoff figure. They went through three bank departments until they could get to someone that would give them a 10 day payoff commitment letter. After that, I went to my agent, picked up my check, dropped off my title and spare keys. The Lienholder still got paid, and I got the difference. However, even though the Lienholder was paid off, it won't show as such on your credit report because the debt was discharged in BK.

[LadyInTheRed]

Thanks to you both...so I assume too that if the insurance check isn't large enough to cover the balance of the loan, I am still not on the hook for the deficiency because of the discharge?

Correct.

[laurannm]

Thanks! So on a slightly separate note, I keep hearing the phrase "negotiate a settlement" with the insurance company. Any advice on the best way to that? When the adjuster comes back and offers the settlement, what negotiation tactics should I use to ensure I am getting a fair deal? Never been thru this before

[BrokeinMD]

http://www.nadaguides.com is what my insurance company used. Look up your car here, it gives you the low/medium/high "black book" value. My insurance company didn't use the blue book value, as that can fluctuate the value by personal sales.

[mijd]

I'm a little lost on this one. Maybe MA law is different than FL but I was under the assumption that when a person signed a Retail Installment Contract the lienholder was listed on the title and was listed as loss payee on your insurance policy. If not, I'm sure the lienholder would have added barge insurance to protect their interest in the car. When you contact the insurance company after an accident, the bank is notified. If your car is totalled, the value is pulled from NADA. Black Book values are used between auto dealers as they are strictly wholesale prices. I've never heard of negotating with insurance companies unless your car was "super clean". Sometimes you have to have extra insurance to cover things like pricy ad ons or aftermarket electronics.
I'm surprised that if you didn't reaffirm your car loan and if it was included in your BK that the lienholder didn't repossess or that the BK judge didn't make you give up the car unless it wasn't worth anything. But then again laws are different in all states. Normally if your car was worth more than what you owed, you would be given the residual. I not sure if you owed more if you would be on the hook for the remainder because of your BK. Please let us know the outcome. Thanks.