Can I get out of my car loan if my car was stolen and totaled and I didn’t have any insurance on it?

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Can I get out of my car loan if my car was stolen and totaled and I didn’t have any insurance on it?

My car was stolen by some teenagers; it was destroyed and I had no insurance at the time. The teenagers are in custody. I just got the car last year and still owe the bank Is there anyway that I can get out of this loan?

Asked on May 6, 2014 under Accident Law, Mississippi

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

No, unfortunately, it is very unlikely you can escape the loan:

1) Your obligation to the bank is not affected by the fact that your car was stolen; your obligation to pay is a contract, and a contract is not terminated due to the actions of people (the teenagers) who are not a party to it.

2) Not having insurance does not allow you to escape paying the bank; all not having insurance does is deprive you of anyone else to pay on your behalf (i.e. an insurer).

Depending on how much you owe, you may need to consider bankruptcy as an option.


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