What happens when you total out a car that only has liability insurance when in a Chapter 13?

Asked on October 18, 2014 under Bankruptcy Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Directly, nothing happens beyond what would happen if you totalled a car while not in Chapter 13 lacking insurance: a chapter 13 bankruptcy is about your income and ability to pay and does not involve the liquidation of your assets. Furthermore, if you already filed Chapter 13, then any debt arising out of totalling the car (e.g. if your were leasing or financing it, and so have to pay a lender or dealer) is not part of the bankruptcy, since debts arising after filing do not become part of the bankruptcy. Therefore, this should be essentially the same situation as if you had totalled the car at any other time.

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