OK.. gotta question... how is this gonna work..

[rameleg]

Scenario
Filed chapter 7... everything is fine... been 30days since meting of creditors.. still waiting on discharge paperwork

Situation:
Wife is involved in automobile accident (not at fault)
-if they total the car technically we don't owe the debt(we have not signed a reaformation(sp?) agreement what happens? my attny said "take the check they give you and buy a new car" but there was a loan(that was/will be discharged) on the car.. so... that doesn't sound right.. are they going to cut me a check? or cut a check to chase auto finance(what I thought would happen)

If they don't total the car
-lets just say its $4k in repairs(wouldn't really want to own the car it was a NASTY accident)...
-can we relinquish the car to chase and ask for a check for the repairs(AKA I'll "fix" the car myself and just purchase a new vehicle with said check)

What should I do?.. the advise my attny gave me just doesn't sound right

thx in advance,

Ryan

[justbroke]

If the insurance company knows that there is a lien on the car, they will likely issue a check in both your name and the insurance company's name. Since the debt wasn't discharged, yet, you are in a limbo period.

Your best best. Speak with your attorney immediately. If the insurance company sends you a check, whether it's in both the insurance company and your name, or solely your name, hand it to the attorney. The attorney will probably need to file a motion to deal with this to make sure the proceeds don't belong to the lender.

More than likely, the lender has a claim for the insurance since the vehicle is still a secured debt. This would be like getting a windfall should your non-reaffirmed home burn to the ground, right after filing. I don't think that's the intent of the Code.

Interesting though. The bad part is that you're not reaffirming, so your lawyer can't do the motion to substitute collateral.

Also, Chase may just "sell" it to you as junk. You just never know. Work with your attorney.

[rameleg]

If the insurance company knows that there is a lien on the car, they will likely issue a check in both your name and the insurance company's name. Since the debt wasn't discharged, yet, you are in a limbo period.

Your best best. Speak with your attorney immediately. If the insurance company sends you a check, whether it's in both the insurance company and your name, or solely your name, hand it to the attorney. The attorney will probably need to file a motion to deal with this to make sure the proceeds don't belong to the lender.

More than likely, the lender has a claim for the insurance since the vehicle is still a secured debt. This would be like getting a windfall should your non-reaffirmed home burn to the ground, right after filing. I don't think that's the intent of the Code.

Interesting though. The bad part is that you're not reaffirming, so your lawyer can't do the motion to substitute collateral.

Also, Chase may just "sell" it to you as junk. You just never know. Work with your attorney.

I have the reafformation agreement right here... I could reaffirm right now.... what is a substitution of collateral and how would that benefit me?
My attny said "take the check and buy a car"... so ... I guess I should take his advise

I was wondering about the "junk" sale also... being that the car is no longer worth what its owed.. can I pay the salvage value and call it a day?

What should I do if they don't total it and want to repair it?

[justbroke]

I think that you just have to find out about the check and worry about that. Don't worry about signing any reaffirmation (don't!) and the motion to substitute collateral is a "specialized" technique for this specific case, IF you had reaffirmed. Anyhow, in this particular case, I would not reaffirm, and would have rescinded the reaffirmation anyhow, after the accident.

I would consider both cases... you'll get the check... or you'll have to go find a new car and you have no money.

[rameleg]

I think that you just have to find out about the check and worry about that. Don't worry about signing any reaffirmation (don't!) and the motion to substitute collateral is a "specialized" technique for this specific case, IF you had reaffirmed. Anyhow, in this particular case, I would not reaffirm, and would have rescinded the reaffirmation anyhow, after the accident.

I would consider both cases... you'll get the check... or you'll have to go find a new car and you have no money.

Well we owe less than its worth... KBB is $9950(in good not xcelent condition) and we owe(or should I say owed) $6200 ish..so we would be able to get some sort of restitution in either case, we have continued to pay since we filed and we were going to keep it.. but now...

What about if they try to fix it?... it was a NASTY collision and I DO NOT want it repaired and then have my wife cruising around in a ticking timebomb... can I have them cut me a check for the repairs and then call Chase and say... "come get your car... its at stanleys towing"?? or is that "shady"

By the way... thanks for your help!!

[justbroke]

It's not up to you to decide whether to total the car or not. That's a decision by the insurance adjuster. Hopefully, you have exempted the equity in the vehicle. You "may" have a case that you are entitled to at least the equity in the vehicle at the time of the accident. Perhaps, this is what your attorney is thinking.

[tcreegan]

Hi rameleg, Hi justbroke,

Unless Ohio body shops charge half of what they do around here, it is a safe bet the car is totaled. So...

At fault insurance company is going to negotiate a settlement $ with either you or your insurance co.

If they settle w/ your insurance co. standard business practice will be to pay off the lienholder, send you the rest.

If they settle w/ you or you get your insurance co to send you the check, the descent into the moral quagmire begins....

(i) You call Chase Auto, tell them the car has been totaled, pay off the balance, keep the rest, sell the car at salvage
(ii) You call Chase Auto, tell them the car has been totaled, negotiate how to split the settlement check (remining them that you did not reaffirm and technically owe them nothing)
(iii) You call Chase Auto, tell them the car has been totaled, it is at Freds Towing, so sorry, I'll leave it in your hands now.
(iv) You call Chase Auto, tell them "someone towed the car away" "It wasn't stolen, someone towed it" "I have no idea, how am I supposed to know that" "I need to put you on hold" "Hold on, I can't find anyone to help you, can you call back tomorrow"

(i) = too honest
(ii) = good citizen award
(iii) = most folks, sounds like your atty too
(iv) = paybacks are hell

Anyway, thanks for playing along....

Tom in Colo