Indiana, PA - Indiana County

SMART MONEY: House due for foreclosure still needs insurance

on June 09, 2013 2:50 AM

DEAR BRUCE: Due to health issues and associated expenses, I have lost my means of income and had to file bankruptcy, which has included my home. I am still in the house awaiting foreclosure, which I am told can take some time, depending on the bank.

My attorney for the bankruptcy advised that I continue to pay insurance on the home as long as I am occupying it. If I am no longer making payments on the house, do I still have an “insurable interest” in the home? Would it be more appropriate to obtain coverage just for my belongings, such as renter’s insurance, or is that even a possibility in a home that is not technically being rented?

I don’t object to paying the insurance, but I am not sure that I would even be appropriately covering the asset of the home or my belongings. — M.C., via email

DEAR M.C.: You bring up an interesting point: Do you have an insurable interest? I don’t know the answer to that.

Technically, the home is still in your name. I don’t know how you can qualify for renters insurance since you are not a tenant at this point. The fact is, the only question you’re concerned about is the building; you’re clearly interested in covering the contents, and that has nothing to do with the fact that the home is being foreclosed upon.

You might wish to get an opinion from a qualified insurance agent or another attorney. Given the fact that this is a relatively short proposition, I would continue to carry the regular insurance on the house, and more important, on your own property, and of course, liability insurance.

DEAR BRUCE: I owned a small retail gift store for 28 years.

When I closed my business, I entered into an agreement with a neighboring florist/gift store to purchase the balance of my inventory at 10 percent to 15 percent off wholesale. Displays and fixtures were free with purchase of the merchandise.

The purchaser and his partner had the opportunity to inspect the merchandise and both signed the purchase agreement, which included a deposit and 12 equal monthly payments.

The deposit was paid, followed by only four monthly payments.

On the one-year anniversary date of the sale, I contacted an attorney to determine my options to receive the $8,000 balance owed me. A judgment was entered, but it is my understanding that the judgment would only be viewed if the florist/gift store owner(s) applied for a loan or additional credit.

Do you have any additional ideas as to how I might approach this debt? — M.F., Belleville, Ill.

DEAR M.F.: I don’t see a real problem here. If you go for a judgment against them, I don’t see any reason why you can’t move against the individuals for whatever they are drawing in terms of a salary, etc. You should be able to attach it.

If you squeeze them hard enough, it may very well be that you can come back and say, “Look, I will take $7,000 cash,” but I don’t see why there is some restriction making the judgment applicable only if they apply for a loan or additional credit. If you get a specific judgment against the individuals involved, you can then go for an attachment to their salaries or whatever else they own.


Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.

The Bruce Williams Radio Show can now be heard 24/7 via iTunes and at www.taeradio.com. It is also available at www.brucewilliams.com.

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