Anyone considering bankruptcy might have concerns about how the filing could affect them. While filing for Chapter 7 or 13 in a California federal court may help someone struggling with insurmountable debt, bankruptcy will remain on someone’s credit history for ten or seven years, depending on the chapter filed. Such marks on a credit score could impact not only borrowing but even car insurance quotes.
Post-bankruptcy car insurance policies
Insurance companies base car insurance premium quotes on several factors, including previous moving violations. Credit score also factors into the quoted price for a policy, and bankruptcy will significantly bring down a credit score. So, the policy quote for someone who filed for bankruptcy might be much higher than what the person paid before filing.
Shopping around for competitive quotes may result in finding the most reasonable pricing. A little research could reveal which insurance providers offer the fairest rates to post-bankruptcy policy seekers. Also, giving the insurance representative as much information as possible about factors that reduce risk might reduce the price. For example, someone who keeps a car in a garage might keep their car safer from damage or theft than someone who parks on the street.
Issues such as paying more for car insurance and other issues people experience during life after bankruptcy may be minor compared to the potential upsides of seeking protection. When someone cannot survive financially because of excessive debt, they could find themselves facing lawsuits, repossessions and other adverse actions.
Many will file for Chapter 13 bankruptcy, which involves restructuring debt to pay off non-discharged obligations. Those who qualify for Chapter 7 would see the trustee liquidate non-exempt assets to pay off certain obligations. Both chapters open doors for a fresh financial start for debtors.