What can happen if I spend the auto insurance settlement money that's supposed go to my lienholder?
The entire amount of my insurance settlement was deposited into my bank account instead of going to my lienholder. I was owed a portion of it, but I'm wondering what would happen if I just spent it. I could really use the money right now.
“While your car insurance company might have made an error in depositing the money into your account, you should not spend what you’re not entitled to. You’ll want to reach out to your lienholder and let them know about the mistake. You’ll also want to let your insurance company know.
Since the lienholder was expecting the money, you would face consequences for spending it. This means they could require you to pay the loan off in full immediately, or they could take legal action.
Once the insurance company is aware of the error, the deposit will either be reversed completely or they will withdraw the amount owed to the lienholder. While this is getting sorted out, you’ll want to make sure that you’re still making your loan payments on time, if due. “
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