Bankruptcy, Forced Place Insurance, and Success...
When a person buys a house or a car, part of the contact they sign requires them to have insurance on the property until the loan is paid in full. If it is a car, you are required to have full coverage and not just liability insurance.
It is important to notify your insurance company who is the lien hold on the insured property so they can be properly notified. If you do not have insurance or the lien holder is not aware of you having insurance, they will have forced place insurance. This will cause your payments to go up, and forced place insurance is usually much more expensive than if you were to purchase it on your own.
If you file a bankruptcy, it is required you have full coverage insurance on any cars you still owe money to a creditor. It is important to have full coverage insurance on your car, or the car creditor will file a motion to lift the stay and it will be granted or you will be given a couple of days to get insurance, provide proof to the car creditor, and will have to pay their attorney’s fees for them filing the motion with the court.
Homeowners insurance is a little different. Mortgage companies will generally just get the house insured and increase your payments by a few hundred dollars a month. Mortgage Company will also include the cost of the forced place insurance in their proof of claim if they have already purchased it. This can cause a huge discrepancy in what the Debtor lists in the plan and what the Creditor is requiring be paid. In the long run, it is always cheaper and in the best interest of the Debtor to always have his property fully insured as required by the contract they signed when the purchased the property.
Many people file a Chapter 13 Bankruptcy case in order to protect property, either a home or a car, or at times to pay back on IRS debt. However, few people understand that the success rate in a Chapter 13 case is fairly low. Roughly 1/3 of all Chapter 13 cases actually make it through the full duration.
Therefore, it is important to understand how to be successful in a Chapter 13 case. When filing the case it paramount that you understand what your monthly payment is to be paid to the Trustee and what it is paying for. At the same time, you want to stay on top of all other payments that you have that are not included in your monthly Trustee payment. This would include payments on your mortgage, any car payments being made outside of the bankruptcy case, and insurance. Once you are able to budget for these payments, then it allows you to know what you will have left over for food, clothing, health care, and extracurricular activities.
You also want to stay in contact with your attorney to prepare yourself or your attorney for any expenses or financial situations that are not planned for in order to cure any problems that may cause you to fail.
A Chapter 13 bankruptcy case is a long endeavor with a lot of pitfalls. But, if you are aware of what lays ahead and can position yourself to handle the unexpected, then you are one step closer to a successful completion
For more information visit http://www.bankrupcy-
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