Keeping car insured but going to surrender

[jetsfan2010]

Tried searching on the board, couldnt find the answer...

I will be surrendering one car with my chap 7 refile in a few weeks, but wanted to confirm if I should keep insurance on the car leading up to the filing date. As is stands now, having 2 cars on my insurance policy makes my monthly premium about 80 dollars higher than it would be if I just listed the car I do intend on keeping.

I am not including the car payment of the car I intend on giving up, however I am including it in the insurance spot on my schedules.

Thanks,

[newbie2]

Going forward though you won't have that car insurance expense. I don't know how the trustees would view that...

[jetsfan2010]

@newbie - thats a question my attorney didnt seem to have full clarity on. I guess Im trying to find out from people who have surrenedered cars in the past. Have they kept insurance on those cars and included that cost on their schedules?

[Pandora]

until the lender takes the car back, in VA you must have insurance on all vehicles titled to you - even those that do not run and are sitting (The law was passed a few years ago regarding required ins. on non-running cars / sitting cars/ etc). The last thing you want to happen is to have VA place mandatory insurance on your car; that could cost you upwards of thousands.

As to the amount you list - remember your ins. rate will go up as soon as you file BK (VA is a credit profiling state).

ETA: remember too that once the lender takes the vehicle back to call your local Treasurer and have it removed from your personal property taxes

[Exployer1234]

TN is the same way. You have to have the car insured up to the time it leaves your driveway on a tow truck. I surrendered my car prior to BK. Long story short the bank tried to file a wreck in my name after the car was taken. The insurance company had everything documented on why I canceled the insurance. So make sure you cross your P's and Q's.

[drowning123]

I kept mine insured until the wee hours of the morning when the truck came to haul it away. I was paying just about $80 a month as well. Include the expense. P.S. I included my mortgage as an expense even though I had stopped paying it 4 months prior to filing.

[jetsfan2010]

thanks for the updates guys. I guess it helps me re: the expenses. Funny thing is I can include that insurance payment, but I cant include the actual loan payment?

[drowning123]

Why not, Jets? I included mine and I had stopped paying on the car 3 months prior to filing. But I'm in NY - so makes a difference?

[jetsfan2010]

Why not, Jets? I included mine and I had stopped paying on the car 3 months prior to filing. But I'm in NY - so makes a difference?

had you already replaced the car with another one and another payment? my attorney led me to believe that I wouldnt be able to include 2 cars with me being the only driver. I might have to bring this up to him tomm.

[drowning123]

Oh, I see. I only had one car, but I didn't replace it with another one. I had an attorney as well, and all that I'm telling you was under his advice.

[bcohen]

until the lender takes the car back, in VA you must have insurance on all vehicles titled to you - even those that do not run and are sitting (The law was passed a few years ago regarding required ins. on non-running cars / sitting cars/ etc). The last thing you want to happen is to have VA place mandatory insurance on your car; that could cost you upwards of thousands.

As to the amount you list - remember your ins. rate will go up as soon as you file BK (VA is a credit profiling state).

ETA: remember too that once the lender takes the vehicle back to call your local Treasurer and have it removed from your personal property taxes

How, exactly would a state enforce the requirement for insurance on a non-running car, or a car that is not being driven? Here in Arizona, the primary means for enforcement to extort people into paying for car insurance is that if you are stopped by the police for some reason and do not have insurance then it's a $1000 fine, or $500 if you purchase insurance before the court date. If the car is inoperable, or not being driven, then how exactly would the police even know if you have insurance on it, much less be able to issue you a citation for not having it?

[malf1204]

Actually VA does not have a mandatory insurance law. You have the option of purchasing insurance or paying a 500 fee to the MVA. Non-registered vehicles or non-operable vehicles are exempt so I would turn in the tags and cancel the insurance. That is what I did here in Maryland and everything was fine. The MVA in VA will not fine you unless you are caught driving the vehicle without insurance or the 500 fee payment as long as you have valid insurance on the car you are driving you are fine.

[Pandora]

Actually VA does not have a mandatory insurance law. You have the option of purchasing insurance or paying a 500 fee to the MVA. Non-registered vehicles or non-operable vehicles are exempt so I would turn in the tags and cancel the insurance. That is what I did here in Maryland and everything was fine. The MVA in VA will not fine you unless you are caught driving the vehicle without insurance or the 500 fee payment as long as you have valid insurance on the car you are driving you are fine.

Yes VA does have the requirement and it is mandatory for ANY vehicle. Then you get into county requirements, which is a whole different ball game in addition to state mandated laws. You either must have proof of insurance OR you can do the SR-22, one way or another you must have proof of either/or.

"..Consequently, VA law requires you to prove that you are insured, as a driver, whether or not you register a vehicle in your name. So if you end up not registering your vehicle, since it is inoperable, you would need to get a non-owner's insurance policy to file the SR-22 if you do not have another car to place insurance on. .... In most states you are required to carry insurance on it, whether it is operable or not. If you fail to maintain insurance on it, you may not be able to make a claim if you have an accident in another vehicle, even if that one is insured. Therefore, if you want to drop coverage, make sure you surrender the tag to your state DMV, and explain that you no longer wish to keep the car registered. "

What does that mean? It means if you are of driving age (16) you must be insured on some policy or another because legally you are able to drive ANY car, no matter if its yours or not. In our house, our policy does not allow for others to drive our vehicles - only us; that means that if our friend drove our car and we werent in it - their insurance would have to cover any damages and our ins. co. would have to sue to get reimbursed. When our daughter turned 16 we were required to add her to our policy as a driver even though she didnt drive yet and only had her learners.

If you unregister your car, then the county codes come into play, with many stating the only way to avoid the requirement is if you house it in your garage (non-running) and have no tags on it; just putting a car cover on it wont suffice. Otherwise, if there are tags on it - even antique ones - you must pay for the minimum insurance requirements mandated by the state - OR - you must file an SR-22. Then there's the whole fire / vandalism thing that comes into play for non-operating / sitting vehicles. you can get just that ins. on your car, but one way or another - the car will have to have insurance or you pay for the SR-22.

Here is an overview: http://www.carinsurance.com/kb/content40262.aspx

I should know how it works - we have a car that's being restored and doesnt run - wanted to remove ins. on it and couldnt fully do so. It now has fire / theft / vandalism coverage and thats it, but we still had to provide proof of ins. to DMV since the car is listed on personal property taxes.

[IamOld]

Pandora and everyone - I had a motorcycle repoed in early April - these people still have it on my DMV record so I still have to pay ins...how can I let DMV know - can I just tell them it's been repoed? (It's being "surrendered" as part of Ch 13 of spouse, and dear lawyer of lender already filed and got lift of stay - thing is we haven't had the thing since APRIL!!)

[sunshinepa]

Pandora and everyone - I had a motorcycle repoed in early April - these people still have it on my DMV record so I still have to pay ins...how can I let DMV know - can I just tell them it's been repoed? (It's being "surrendered" as part of Ch 13 of spouse, and dear lawyer of lender already filed and got lift of stay - thing is we haven't had the thing since APRIL!!)

Why don't you just call the DMV and speak to somebody about it? Explain the situation and see what they say????? Or, call your insurance agent. I can see having to pay for any insurance for vehicles you are driving but find it hard to believe you must insure a vehicle that was repo'd. I would be calling the DMV for sure.

Good luck!