Legal Question in Credit and Debt Law in Georgia

No one here knows what the documents say or what you signed. However, it is safe to assume that in the great majority of the cases the answer is yes. In fact, the insurer will usually write the check to the lender. If you received a discharge of the debt, it is rather obvious that you are asking how to take the lender's collateral without paying for it.

I had the same thing happen to my client. How much is left on the vehicle versus the value of the car? The finance company keeps its security interest in the car. You should talk with your insurance company about the value of the car to determine how much the finance company is entitled to take.

This is the same thing that would happen if you had not filed for bankruptcy, but the value of the car exceeded the amount owed. In that instance, if a person owes $15,000 on the car, but the car is worth $20,000, the finance company would take $15,000 and the owner would take $5,000.

The difference occurs in this scenario.

If the totaled car is worth $10,000, but $15,000 is still owed on the car, the person who filed for bankruptcy would owe $0. The finance company would take the $10,000 and eat the $5,000. It couldn't come after the person who filed for Chapter 7.

On the other hand, for the person who had not filed for bankruptcy the finance company would take the $10,000 from the insurance company and, the person would still owe the finance company $5,000.

The person you should be asking is your bankruptcy lawyer. If you did not sign a reaffirmation, you had no liability to pay but the creditor retained the right to repossess and their lien, so likely they have a claim to the proceeds. Your lawyer will be in a position to determine what claim they have. Call him.