May I keep an insurance check on a vehicle whose debt was discharged in a Chapter 7 bankruptcy?
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May I keep an insurance check on a vehicle whose debt was discharged in a Chapter 7 bankruptcy?
My van, which was already in poor condition, was recently hit by a motorist. About $3500 in damage was done to the rear passenger side. I have been making voluntary payments and keeping possession but now would rather use the insurance check to get another vehicle and return the van. Can I keep the check, or must I fix the van, or do I have to turn the check over to the creditor?
Asked on November 6, 2010 under Bankruptcy Law, Oklahoma
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Ok was the debt really discharged and you are really making voluntary payments? Or was it reaffirmed and you are now continuing to make the payments? I doubt that the law would allow you to return the van without liability for the damage. I can not imaging that the creditor would be out of luck for the damage that was involved with the van AFTER discharge, but I could be wrong. The creditor is allowing you to make the payments and not execute on his right to repossess the van after discharge but I would be hard pressed to say that he gives up his rightto sue you for the subsequent damage. I would seek confirmation from an attorney in your area. No one can make this decision for you though. You have to decide that yourself.
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