Chapter 13 in Bankruptcy is stressful enough, but what happens if an at-fault driver hits you and totals your car? The stress can be overwhelming. Wondering whether you’ve lost your only way to get to your job or that you need to pay off your bankruptcy?
Your options depend upon whether the at-fault insurance company (or your uninsured motorist insurance company) deems your vehicle a total loss. You can take steps to make sure these options stay open to you. Here is what you should do:
- CONTACT YOUR BANDRUPTCY ATTORNEY—Contact your bankruptcy attorney so he or she can start working on getting the bankruptcy court’s permission to settle your bankruptcy and purchase another vehicle.
- TELL THE AT-FAULT INSURANCE COMPANY—Tell the at-fault insurance company *or your insurance company of the at-fault party had no insurance) and let them know you are in Chapter 13.
- GIVE THE PAYING INSURANCE COMPANY THE NAME OF YOUR BANKRUPTCY ATTORNEY.—-Tell the insurance company paying the claim the name of your bankruptcy attorney.
- TALK TO A PERSONAL INJURY ATTORNEY—Contact a personal injury attorney and make sure she has your bankruptcy attorney’s contact information.
- CONDITIONALLY AGREE TO THE INSURANCE COMPANY’S PROPERTY SETTLEMENT.—We say “conditionally” because you ultimately need the bankruptcy court’s approval. Discuss the insurance company’s property valuation with your personal injury attorney; but understand there isn’t much “wiggle” room in the value sums an insurance company offers for vehicles (See our Report: Settling your Auto Property Damage Claim Without a Lawyer
- KEEP YOUR BANKRUPTCY ATTORNEY IN THE LOOP—-Keep your bankruptcy attorney in the loop as you negotiate with the insurance company so she can advise you about the steps you need to take when getting a replacement vehicle.
- FIGURE OUT HOW MUCH YOU CAN SPEND FOR A CAR. Working with your bankruptcy attorney, figure out how much you can spend per month on another vehicle
- KEEP WITHIN YOUR BUDGET.—Look for another vehicle that is in your budget.
- TELL YOUR BANKRUPTCY ATTORNEY YOUR NEW MONTHLY CAR PAYMENT. Provide the new monthly amount for your replacement vehicle to your bankruptcy attorney.
- HEARING BEFORE BANKRUPTCY ATTONREY. Your bankruptcy attorney will get a hearing before the bankruptcy court as soon as possible to:
- Settle the property damage claim.
- Modify your bankruptcy to account for the new vehicle payments.
- Obtain permission to purchase the new vehicle.
This is an overview of the process for getting your property damage settled and getting a replacement vehicle.