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DrakeLAW
DrakeLAW, Attorney
Category: Bankruptcy Law
Satisfied Customers: 787
Experience:  Attorney at Drake Law Firm PLC
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I declared bankruptcy in 2014 and kept my car but did not

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I declared bankruptcy in 2014 and kept my car but did not reconfirm the loan. Just made payments. In 2015 a truck hit me from behind and the insurance company gave me $1700 to fix the car which I did not. The car has 158,000 miles on it and now I want to turn it back into the bank ( which they agreed to come pick it up but they do not know about the $1700 of damage). Will I have to pay the bank the $1700 or since the car is not worth anything due to the high mileage now ( KBB estimates about $500 worth - its a 2013 - even before the damage it was only worth KBB approx. $1000) will they just call it a day and sell it for scrap? I live in NJ btw.
JA: What state is this in? And how old is the truck?
Customer: NJ and it is a car - 2013 with 158,000 miles. It was brand new when I bought it.
JA: Has anything been filed in civil court? If so, what?
Customer: No. The car was included in the bankruptcy and I did not reconfirm the loan. Just made the payments. I just called the bank yesterday to arrange pick-up
JA: Anything else you want the lawyer to know before I connect you?
Customer: I just got approved to buy a used car through a different bank and I am supposed to pick up the vehicle tomorrow. Ok
Customer: replied 5 months ago.
Oh and I filed a lawsuit against the other driver because I sustained injuries from the accident so I am suing for my medical bills, etc...

Hi, my name is ***** ***** I look forward to helping you, please give me a moment to review and possibly research answers to your question.

Customer: replied 5 months ago.
Ok thank you. I appreciate it

That's an interesting question actually. You are definitely not liable on the debt for the vehicle but since the accident happened post-petition you could have to use the money to fix the vehicle. I will have to do some research on this one. Please be patient. Thank you.

Customer: replied 5 months ago.
Ok thanks. If it helps, right after it happened I did ask the attorney I worked with for the bankruptcy what he thought and he said "off the record" they probably won't come after you since even back then it had a ton of miles on it but.....I just want to be prepared seeing that it is now 3 years later and now I am actually returning the car...ha

haha ok, I suspect that will be the result. That they could but will not come after you. But let me see if I can find some case law on it.

Customer: replied 5 months ago.
Ok thanks. I appreciate it.
Customer: replied 5 months ago.
Hi Rich - were you able to find any case law references?

Hi, sorry, no I did not find any case law. I have concluded that is because this is not a bankruptcy law question. We know since you did not reaffirm, you are not liable for the debt secured by the car and it is discharged in the BK.

Also, since the accident happened post-petition, any money received from it is not property of the estate.

The only issues then is between you and the insurance company. I am actually surprised that the repair shop wasn't paid directly or the check was not joint-issued to you and your insurance company., Your loan agreement with the bank might say that any insurance paid for repairs must be applied to the vehicle and so then you would be in breach of that loan agreement.

I would not say there is any fraud issue unless the check was issued to you and the bank and you cashed it anyway without their signature.

So this guys back to my initial thought that probably they are entitled to it but won't do anything about it. Did they get the car yet and have you heard from them? Thanks for your patience.

DrakeLAW and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 months ago.
Hi - thank you. I did return the car to them on Wed of last week and I have a certified letter that I have to pick up from the this morning. I am assuming that's them notifying me that they are in possession of the car and I'm no longer responsible for it. I have the money if I need to pay them what the insurance paid me so I'm not overly worried about it and i intended to just pay off the loan and keep the car so no fraud was intended on my part (the check was made out directly to me) but after two more years went by I was like forget it! Thanks for the help - I'll let you know what the letter says so you know for a future question for someone else...