Legal Question in Credit and Debt Law in California
A long while ago (early 2007) my sister totaled my car in an accident in which she was at fault. I called AAA to report the claim, and they informed me to my horror that I did not have auto insurance with them any longer, due to the fact that I had not paid my roadside service. My insurance was paid up, but they canceled at the end of the last month because of roadside.
They said they notified me via mail, which I never got because I had moved. However, they said the burden of proof that I had not received the mail was on me, since they had proof that they sent it.
Because I was screwed here, I continued making payments on the car, and also making $60 payments on storage since I had to now store the destroyed vehicle. Now I'm having trouble making my payments since I'm starting a family.
Is there nothing I can do? I know I have GAP insurance on the loan itself, but I don't think that applies since I didn't have full coverage on the vehicle at the time of the accident.
What happens if I just stop paying? They'll attempt to repossess the vehicle, but then what happens when they realize the vehicle is totaled? Will they garnish my wages? Also, what about the actual junk worth of the vehicle for parts? It's probably worth about $1500 in parts, will they take that off of the amount owed? I'm lost with no idea what to do.
1 Answer from Attorneys
If you just stop paying, they will repossess the vehicle and sell it at auction. Clearly, if the car is totaled, they will not recover anything at auction (it won't even be the $1,500 you think it's worth). As such, they will then sue you for the deficiency (the balance due after deduction of what they recover at auction). Once they have a judgment, yes, they can garnish wages, they can levy bank accounts, and pursue any and all other assets you own. You may want to investigate further the GAP insurance issue - it may be too late to make a claim on that, and you may be correct that without underlying insurance, your claim may be denied. But, it is worth getting a copy of the coverage documents, reviewing them and probably making a claim even if they are going to deny it. AAA is not responsible for tracking you down to notify you that your policy had lapsed. If they sent it to the last address they have, there is probably nothing to pursue there.
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