My car payment is paid thru the plan (Chap 13). I am shopping for new insurance since I moved to a different state. I am finding a few companies are offering "Gap Insurance" to cover the difference of what I owe on the loan and cash value of the car if in an accident. Do I really need gap insurance if the car is in a BK plan?
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Filed 9/14/09
Confirmed 12/11/09 -
As long as you are not in a 100% payback CH13 than you probably don't care, if the car was totaled and the insurance didn't cover the balance, any difference would just become another unsecured debt.
But if you are at or near 100% payback than it may be in your best interest to have the gap insurance (especially if given moving to a new state, you are going to file a plan change anyway which could include the new insurance price including gap coverage)
Also depends on how upside down you are on your vehicle loan. -
The GAP insurance will have no affect if you're going to surrender the vehicle in a Chp 7. Additionally, GAP insurance is generally a one time flat fee ranging from $300-$1,200 depending on who you purchase it from and the dollar coverage amountThe information provided is not, and should not be considered legal advice. All information provided is only informational and should be verified by a law practioner whenever possible. When confronted with legal issues contact an experienced attorney in your state who specializes in the area of law most directly called into question by your particular situation.Comment
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