What Are My Insurance Requirements When I Am in Bankruptcy
The United States Bankruptcy Code requires that you maintain all policies of insurance required by law and contract. For example, if you have a vehicle you are leasing or purchasing the lease contract or purchase contract typically requires you to have full-coverage insurance on the vehicle. Those are examples of insurance required by contract.
Even if your vehicle is paid in full, if you are driving the vehicle in Michigan the Michigan Motor Vehicle Code requires you to at least have “no-fault” insurance. This is an example of insurance required by law. This type of insurance is also commonly referred to as “collision” or “PLPD.”
If you have a vehicle which is not being driven and parked on private property, you are not required to have insurance on the vehicle. However, if you live in an apartment complex many residential leases require the vehicles parked in its parking lot to have a valid license plate and to be insured.
If you have a mortgage, the mortgage typically requires you to maintain homeowner’s insurance on the property. This is another example of insurance required by contract. There is no law that requires you to have homeowner’s insurance on your property if it is paid in full, but is still a good idea to have insurance to limit your liability.
The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.
By: Michael Benkstein, Esq.
Managing Attorney, Bankruptcy Department
The Law Offices of Joumana Kayrouz, PLLC
1000 Town Center
Southfield, MI 48075