Legal Question in Bankruptcy in California

automobile accident and bankruptcy

I was involved in an automobile accident on March 8th, for which I was found to be at fault in a second accident report (the first one did not list me as being at fault). My insurance premium was due on the 1st, and the insurance company did not post payment until the 12th, even though the payment was mailed on April 30th. Consequently, the insurance company deemed that I was not insured during the accident, and sent me 15,000 bill.

A bill collector for the insurance company called and threatened to send in an SR-1 form to the DMV if I didn't pay $10,000 to him immediately. He also refused putting me on a payment plan, saying that I wouldn't qualify. In addition, he stated that my license would be suspended indefinitely, until the DMV received notice that the entire sum from the accident was payed, regardless of whether or not I declared bankruptcy.

In addition to the $15,000 bill from the insurance company, I have $6,000 in medical and $1,500 in other bills. I am a student, and won't graduate until March 2003.

My questions are:

1) Should I declare bankruptcy?

2) If i declare bankruptcy, can the DMV suspend my license indefinitely?

3) Can a bill collector fax forms on behalf of their client?

Thank you.


Asked on 6/03/02, 3:54 pm

2 Answers from Attorneys
Robert Miller Robert L. Miller & Associates, A Law Corporation

Re: automobile accident and bankruptcy

Thank you for posting your question online. In my opinion, yes, you should declare bankruptcy. You may also have a "bad faith action" against the insurance company, for terminating insurance without sufficient notice, but I do not practice in that area of law, so I can only recommend that you see an attorney regarding that aspect of your case.

It is not true that a BK will not help you with the DMV. Discharging that debt before judgment will keep anything from happening to your license, and if you do get a judgment, the DMV license suspension will be lifted for 10 years, or longer if the plaintiff does not renew the judgment.

I hope this helps, but if you have any other questions, please feel free to email me directly, or call my office at 1-877-568-2977 (toll free) and I'm happy to help.

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Answered on 6/03/02, 7:17 pm
Robert Mccoy Law Office Of Robert McCoy

Re: automobile accident and bankruptcy

First of all the bill collector has violated the fair debt colection practices act by lying to in in conneciton with a debt. There is case law that says if you file bankruptcy, even after your license is suspended, you get it unsuspended, just because you filed bankruptcy. You can sue the debt collector for this. I disagree with the other attorneys about coverage. Yes, if you are telling the truth, then your insurance company has acted in bad faith. However, I get the suspicious feeling that maybe your insurance company is like all the rest--they send you a 10 day notice of their intent to cancel every month if the payment is not received by a certain date, instead of an invoice. You did not get a statement like this, did you?

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Answered on 6/03/02, 10:40 pm


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