Gail DonaldsonIf you owe money on your vehicle, most likely your contract requires you to maintain full coverage insurance on the vehicle. Of course, Alabama law requires that liability insurance be maintained whether you owe money on the vehicle or not!

Lack of insurance is one of the most common reasons a creditor lienholder will object to the approval of your Chapter 13 plan.  In the Middle District of Alabama, if insurance was not in place on the date your Chapter 13 was filed and the creditor objects to confirmation of your case, the creditor is often given a future relief provision at confirmation.  This means that if full coverage insurance is not provided in a ten-day window from the date of the order OR if insurance lapses and a new policy providing coverage is not provided in ten days, then the creditor will be granted permission to repossess the vehicle.

Insurance is a Must in Alabama

What happens if you have an accident?  If you do not have insurance, you may still end up paying for a car that is totaled and have no means to replace the vehicle!  If you have a car, insurance is a must!

If you are having financial problems to the extent it is impossible to pay for auto insurance, please contact one of our Bond & Botes attorneys to see if a Chapter 13 bankruptcy will allow you the ability to get a payment plan in place that will allow you to afford your current vehicle.

Gail Donaldson
Written by Gail Donaldson

Gail Hughes Donaldson is a Managing Partner of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She’s been helping families work through the bankruptcy process since she started with Bond & Botes back in 1993 as a paralegal. Read her full bio here.

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