Hi,<\/p>\n
I\u2019m writing tonight to let you know the recent news about automobile insurance refunds and how that impacts people in bankruptcy or who are considering bankruptcy as a lot of clients and friends are. Here\u2019s what you need to know:<\/p>\n
State Farm, the country\u2019s largest auto insurer, is giving customers a 25% credit between March 20th<\/sup>\u00a0and May 31st<\/sup>. Allstate and Liberty Mutual are both issuing 15% refunds on premiums. GEICO announced that they are going to issue a 15% credit that will be applied to your renewal if it comes up between now and October (and a 15% credit on new policies in that same period). American Family Insurance is issuing a onetime $50 refund per vehicle covered by their policy. Farmers Insurance and 21st Century Insurance are giving drivers a 25% reduction in April premiums and USAA is giving a 20% credit for two months of premiums. This is great news for a lot of people because every dollar counts right now.<\/p>\n Some experts have suggested that you call your insurance company. You have leverage right now. They want to keep you as a customer, and they know you\u2019re not driving much right now. Remind them that your premium is based on the mileage they expected you to drive, and you\u2019re not doing that. Even if they won\u2019t give you an outright refund, they may be able to give you other incentives, such as waiving late fees, lengthening grace periods, or providing credits on your next renewal. There\u2019s no harm in calling. Just be nice and see what they will offer. If the answer is no, hold tight. They may start feeling the pressure from the big insurance companies and do it anyway.<\/p>\n Don\u2019t Worry About This Refund and Chapter 7 Bankruptcy Eligibility<\/p>\n Although, technically, these refunds are returning your disposable income to you and will need to be considered in the\u00a0Means Test<\/a>\u00a0calculation for\u00a0Chapter 7 eligibility<\/a>, we are not worried about fitting these into your means test budget analysis. The companies offering money-back refunds are making a one-time refund that won\u2019t have a great impact on your overall budget. The companies offering credits or rebates are of even less concern because the credit or rebate is not \u201ccash in hand\u201d that you can spend on other things. Either way, we can work it out. Just give us a call if you have any concerns about filing a Chapter 7 bankruptcy.<\/p>\n Again, these refunds are technically returning disposable income to you and you\u2019re supposed to turn over any disposable income not accounted for in your plan. But you and I both know that you\u2019re spending a lot more these days and making a lot less. If the Trustee were to ask for the refund, we would simply respond with an analysis of your changed financial circumstances during this crisis. So, don\u2019t worry. We have you covered. Like your stimulus check, we recommend using these refunds for essentials \u2013 groceries and medicine \u2013 and save any extra that you can. If you\u2019re struggling to make your house, car, or plan payments, let us know right away.<\/p>\n I hope this information comes as good news for you. If you have any good news to share or are struggling and need help, please send us a note. As always, email is the fastest way to get a message to me and senior staff.<\/p>\n Together, we will get through this.<\/p>\nWhat if Your Insurance Company Hasn\u2019t Announced a Refund?<\/h3>\n
You Won\u2019t Have to Give the Refund to Your\u00a0Chapter 13<\/a>\u00a0Trustee<\/h3>\n