I Owe Insurance Company £334,000 due to Voided Insurance

GDB2222

Arklight wrote: »

They can ask you for £334,000, but only a court can decide if you are liable to pay. You should exhaust the ombudsman route first, assuming they don't sue you before that is completed.

Without implying you are liable for the costs any more than you have already, explain to them that you have no assets and a modest income (if that's the case). Ask them what they would actually be expecting in terms of a repayment schedule.

They may come back with something you can afford rather than risk going to court and getting less. Do get advice on that though. You don't want to be in a position where if you acquire assets in the future they can lay claim to them.

If it goes to court it might go better than you expect. Judges sometimes don't have much sympathy with large companies and award fairly low monthly re-payments. Bankruptcy could be an option after that. Doesn't sound like it would make much material difference to you at this point.

This thread should be moved or reposted to one of the finance boards as it doesn't have much to do with motoring, and many of the replies have little to do with the question that has been asked.

I think that may have been the point of the waiver form the OP mentioned. He’s accepted liability.

There is a tiny possibility of avoiding bankruptcy, namely do a deal with the creditor to settle for less. But it sounds like it would have to be so much less that the insurance company will not probably accept it. Logically, even 1p is better than the OP going bankrupt, assuming that they would get nothing then. But they probably won’t look at it that way.

Aretnap

Supersonos wrote: »

Recently I was applying for insurance and said I'd had no accidents - the person on the other end then told me I'd been rear-ended a few years previously, something I'd forgotten.

I couldn't help then wonder why they're asking the question when they know the answer, other than to catch me out.

Various reasons, not least that the database is not necessarily up to date or complete - so by asking the question they are giving you the chance to declare anything that isn't (yet) on the database.


Your theory that they were trying to catch you out (presumably so that if you made a claim they could refuse to pay it) is rather undermined by the fact that they immediately put you right when you made a mistake.

AdrianC

Arklight wrote: »

They can ask you for £334,000, but only a court can decide if you are liable to pay.

Given that £30k+ is fees for the cyclist's [strike]barrister[/strike] solicitor, the figure is clearly legally established.

So it's down to whether the amount can be passed back to the OP. The insurer clearly wouldn't have accepted his business if he'd been honest about his licence, so it's an established legal principle that they can.

Aretnap

Definitely get qualified advice before beginning bankruptcy proceedings. One thing to be aware of - debts arising from personal injury claims are not automatically written off by bankruptcy, and this is essentially a personal injury debt, albeit one which has been passed on to the insurance company. I remember some discussion in the past about whether a debt to an insurance company in these circumstances would be subject to the personal injury exception, which didn't reach a definite conclusion. You might get a clearer answer on the bankruptcy board.

custardy

I must add the police said at the time the accident was "just one of those things" and unfortunate. I was not speeding, I slowly pulled out on to the round about in low sun on a February morning and did not see the cyclist to my right. He was injured and taken to hospital but he was back at work a few months later. I stayed in touch with him as I did feel terrible for the accident and wanted to ensure he was okay.

Yes,many people see cyclists being injured/killed as just one of those things.
I mean,whats a few months of being unable to work?

MissMollyJ

Hello OP

This sounds like it has been a catastrophic event for both you and the cyclist.

However - it is not an even worthy of ending your life. I know first hand the ramifications of suicide and I urge you to seek help immediately. There are many people around you who want you alive and part of their lives. Please visit a GP, phone the Samaritans or reach out to anybody.

Additionally I declared bankruptcy nearly 8 years ago now (8 years next month) and I cannot tell you the relief you will feel from this option. Go to the bankruptcy and living with it board where you will get non Judgemental advice and support throughout the process. Get guidance from a charity about what to do- you can do it! You can live your life free of this stress and start to rebuild your relationships.

Good luck
X

GDB2222

Aretnap wrote: »

Definitely get qualified advice before beginning bankruptcy proceedings. One thing to be aware of - debts arising from personal injury claims are not automatically written off by bankruptcy, and this is essentially a personal injury debt, albeit one which has been passed on to the insurance company. I remember some discussion in the past about whether a debt to an insurance company in these circumstances would be subject to the personal injury exception, which didn't reach a definite conclusion. You might get a clearer answer on the bankruptcy board.

I Thought of this but just assumed that the debt to the insurers would be written off. Interesting that people think otherwise.

AdrianC

I would presume that the legal principle in allowing personal injury claims to persist is that the injured should not be disadvantaged by the injurer hiding behind bankruptcy.

In this instance, the injured has been paid out - and the loser would be the insurer.

GDB2222

My DW wrote off a car driving in almost the same circumstances, where she could not see, because of the sun. Fortunately, it was only a traffic island involved, and she was unhurt. However, it was a busy shopping street, and there might have been people standing on that island.

Just remember that it doesn’t matter who is behind you hooting, unless you can see where you are going you can’t go on.

Aretnap

AdrianC wrote: »

I would presume that the legal principle in allowing personal injury claims to persist is that the injured should not be disadvantaged by the injurer hiding behind bankruptcy.

In this instance, the injured has been paid out - and the loser would be the insurer.

We're all entitled to our views on how the law ought to work... but it would be unwise to presume that this translates into how it actually works. Especially when there are six figure sums involved.

The alternative view is along the lines of... the debt is still ultimately owed to the injured; by paying out the insurer has just acquired the right to collect it on the victim's behalf under a subrogation agreement. In which case there is no obvious reason why it would lose its exemption from bankruptcy.

The situation is potentially quite complicated and could depend on exactly what type of agreement/waiver the OP agreed with the insurer. Hence the suggestion that he should get a definitive answer from someone qualified to give it before embarking on the bankruptcy route, rather than relying on an internet forum.

FWIW a quick search of the bankruptcy board brings up this thread on a rather similar situation, where someone from National Debtline suggests that bankruptcy would not automatically eliminate a similar liability to the MIB.