Crazy Insurance Company Bristol West

[Sabor]

What is the name of your state? CA
Hello, my friend has an unusual situation. Her parked car was totaled as well as one more car. The car was worth 7k at the time. The insurance company said she would get 1400 since the person who crashed had 5k liability and the remaining 3400 went to the higher value car. She only had liability so she got nothing from her insurance company. As a result, in an attempt to get any money, she placed a lawsuit against the person who hit her car. Since he already had plenty of debt, without even trying to negotiate with her; he simply filed chapter 7 bankruptcy. She has kept the case open and did not dismiss it because now the company is trying to also dismiss their 1400 liability in the person_s bankruptcy. Additionally, she contacted another insurance involved with the 2nd car; they closed the case and will not be collecting from Bristol west, so now she can get the full 5k.
Does anyone have any advice on what she should do, is this insurance trying to pull a fast one? Can they even do this/ is it legal? So in summation, the insurance company is attempting to wipe their debt to her along in the bankruptcy of their client. Any suggestions or advice? Thank you for your time and consideration.

 

[weenor]

The insurance company is only responsible to the extent that their insured is liable. If the debt is discharged in bankruptcy, the insurance company is not responsible. Your friend will have to fight the discharge of the underlying debt by proving in the bankruptcy court that the debtor willfuly caused the accident. This involves and adversarial proceding and your friend really needs a lawyer.

 

[Sabor]

hmm

"The insurance company is only responsible to the extent that their insured is liable. "
Would it be enough to show that the reason for the dismissal is because the client has filed bankruptcy and not that he was still liable, but just bankrupt?

 

[SkankCheese]

Once bankrupcty is claimed, the debtor is no longer liable for their debts.

It's along the same lines of someone who owes... a contractor, some money. The contractor goes to court and gets a judgement for the amount they are owed... there by saying the debtor is held liable to pay this debt. But if the person files bankrupcty they are no longer responsible for it anymore.


I could be wrong though.

 

[Sabor]

hm

Thanks for reply. However, my problem is not the debtor, in fact she wishes he never filed bankruptcy. She just wanted to settle for like 5k just the loss of the car. She wants to go back to the insurance company and get the claim that they have been lagging. But now the insurance company is claiming that because the debtor filed bankruptcy, they are no longer liable as well. One thing, she did not allow the judge to dismiss the case; she extended it another 30 days.

 

[Sabor]

I received this reply..

For anyone whom may ever read this thread and are interested:

I received this reply from the very helpful girls at twobradleys.com

"
the fact that an insured goes bankrupt does not relieve the insurance company from paying. I know from 15 years of defending insureds, there is case law on this subject.

Your lawyer needs to get relief from the automatic stay of proceedings in the bankruptcy court and should be able to do so when it is explained that you would limit the recovery to the insurance proceeds.
"

Thanks to them, and hopefully it may help others.

 

[weenor]

For anyone whom may ever read this thread and are interested:

I received this reply from the very helpful girls at twobradleys.com

"
the fact that an insured goes bankrupt does not relieve the insurance company from paying. I know from 15 years of defending insureds, there is case law on this subject.

Your lawyer needs to get relief from the automatic stay of proceedings in the bankruptcy court and should be able to do so when it is explained that you would limit the recovery to the insurance proceeds.
"

Thanks to them, and hopefully it may help others.

My only response can be...show me the case law on that one and in the applicable state..insurance law is state driven, not federal...where as the bankruptcy code is federal...when the fed and state law conflict, guess who wins?

 

[Sabor]

hrmm

Just to confirm that you are aware of the exact scenario. The insurance company already is liable because their client crashed into 3 parked cars. They simply have not paid up yet. There was no question of fault. Furthermore, the problem was that the insurance did not want to pay until 3 years were up because they could not find the 3rd car(for 500 damage only). Also the insurance company only wanted to give 1400 for a 7000 value car. So she filed a lawsuit against the person who hit the parked cars. This person filed for bankrupstcy. Now this is where it stands, she wants to allow for dismissal to the bankruptcy for the person she sued but only after confirming that it wont also discharge the original amount due by the insurance company. Bankruptcy discharge is to prevent collection attempts against a bankrupcty debtor. The purpose of the bankruptcy law is not to permit the insurance company from avoiding their obligation to indemnify their insured. So she is only attempting collection of damages payable by the debtors insurance company, who are not a party of the bankruptcy's discharge. Just to allow his insurnace company to benefit from the debtor's discharge would be an injustice and a perversion of the bankruptcy law and would encourage the misuse of bankruptcy protection by insurance companies.

Bristol West Insurance. One of the most unhelpful, cheap , and dishonorable insurance companies to arise from the sample of rude and unethical people.

Bristol West Insurance. One of the most unhelpful, cheap , and dishonorable insurance companies to arise from the sample of rude and unethical people.

 

[moburkes]

Most insurance policies states right in the policy that the insured's bankruptcy does not relieve the company of its obligation for the debt. Just read mine last night before I posted.
(Obviously, I know nothing about case law or statutes).