Insurance claim on Boat last year - didn't fix, Grounds for an AP?

[bk442]

Hello all,

I'm really hoping someone has some input on this. I posted this in another forum, but from the looks of it. I think it belongs here.

I will be filing ch7 in a few weeks and had a question about insurance claims.

Me and my cousin owned a boat together. A 28 footer sport/speed boat. Both of us were on the loan (53k owed, USAA is the lender, insurance is through different company). Cousin filed ch7 last sept. and left me with making the whole payment.

Boat payment has been current until a few days ago.

Here is the part I am worried about:

We hit a log or something underwater beginning of last summer and it damaged the out drive of the boat. It was covered in our insurance policy so we filed the claim. They gave us $9,000 to fix it. We had every intention to get it fixed, but we spent most of it on engine work (I never had a thought of bankruptcy at the time). So now, he is bankrupt (ch7 closed) I am broke and the money is gone. Boat out drive is still not fixed. I plan to surrender the boat in with my bk.

My question is, do I have to get it fixed still? Are they going to find out I had a claim last year and didn't get it fixed? Can that be grounds for a dispute. My lawyer said they would just auction it off, bill me for the difference which would get discharged. But I am a little worried. I still have the old broken out drive I can bolt back on. Or I could find a used one hopefully cheap and bolt it on. Thoughts?

[NoMoreCards]

As with other types of secured interest loans (cars), if the item is repossessed and there is damage then finance company will look to the insurance to repair the item. Being as this has been repaired (paid for) by the insurance, the finance company will not be able to get it fixed at the expense of insurance.

They very well might file a AP on this. Putting the broken parts on it will not make a difference at this point. Please discuss this with your attorney.

I wish you the best.

[bk442]

As with other types of secured interest loans (cars), if the item is repossessed and there is damage then finance company will look to the insurance to repair the item. Being as this has been repaired (paid for) by the insurance, the finance company will not be able to get it fixed at the expense of insurance.

They very well might file a AP on this. Putting the broken parts on it will not make a difference at this point. Please discuss this with your attorney.

I wish you the best.

NoMoreCards,

Thanks for the info. I am going to talk this over with the lawyer soon. I have been looking around, It looks like I can get a used replacement for around $1800. Might not be the exact same model but it will be functional. Now if I only had $1800.

[NoMoreCards]

Definately talk to a attorney about this before spending money to get a part that would make it functional. Perhaps just making it functional would do the trick, but that is lots of cash to spend at a time when cash is just not available.

Keep us posted, this information may help someone else.

I hope it all works out for you.

[Mensa1]

Unless the ins co check was made out to you and the lender I doubt that there is anything that the lender can do about this. Especially since it will soon be a yr ago now. I would definitely discuss with your Atty, and even if he/she tells you there could be a problem, I would get another opinion. Just my thoughts on it.

[bk442]

Thanks for the responses. Yes, the INS check was made out to "(my name) and USAA". I had a USAA checking account at the time and they just let me deposit it. I never even mentioned the ins claim to them. I am leaning towards just getting a used part to fix it. I'd rather not take the risk of getting stuck with ~30k of debt that cannot be discharged. The value of the boat is really underwater (pun intended) I doubt they would get 25k for it in non running condition (i owe 53k)

[Mensa1]

Thanks for the responses. Yes, the INS check was made out to "(my name) and USAA". I had a USAA checking account at the time and they just let me deposit it. I never even mentioned the ins claim to them. I am leaning towards just getting a used part to fix it. I'd rather not take the risk of getting stuck with ~30k of debt that cannot be discharged. The value of the boat is really underwater (pun intended) I doubt they would get 25k for it in non running condition (i owe 53k)

That is probably a wise move; no sense in making this an issue since the check should have been handled differently. The lender could easily make an issue over this, IMO.