Chattanooga Personal Injury Attorneys

If You Are In Bankruptcy Who Gets The Property Damage Check (Part II)

If You Are In Bankruptcy Who Gets The Property Damage Check (Part II)

In Part I of this series, we provided a general overview of how to settle your property damage claim and get a replacement vehicle if you find yourself in Chapter 13 bankruptcy. This part will address the specific things that have to happen to get the bankruptcy court’s approval to settle your property damage claim and obtain a replacement vehicle.

GETTING PERMISSION TO SETTLE THE PROPERTY DAMAGE CLAIM

  1. Once you advise your bankruptcy attorney of the property damage claim, your bankruptcy attorney will contact the chapter 13 Trustee’s office and request the Trustee place any monthly auto loan payment on hold or on reserve until the insurance company offers a property damage settlement.
  2. Provide the written offer from the at-fault insurance company for the vehicle to your bankruptcy attorney.
  3. The Trustee will determine how much, if any, she can reduce your Chapter 13 payments after the anticipated property damage settlement.
  4. Remember sometimes you owe more on the vehicle (because of accumulated interest, etc.) than the vehicle’s “blue book” value (all the insurance company has to pay). When you are in this situation, the amount you still owe to the auto finance company after the insurance company has paid out is made a part of your bankruptcy—it’s not outright forgiven. Also, keep in mind, the Trustee may not apply all of the amount the insurance company pays out for your vehicle to the vehicle finance company. Some of it may be spread across your creditors. It depends upon your plan.
  5. MOTION TO SETTLE AN INSURANCE CLAIM. After you agree to the property damage settlement with the insurance company, your bankruptcy attorney should file a Motion to Settle an Insurance Claim. The Motion to Settle an Insurance Claim requests the bankruptcy court’s approval for you to sign any insurance company documents and for the insurance company to issue the property damage claim check. The resulting Order from this Motion will designate to whom the at-fault insurance company should cut the property damage check to—either the finance company or the Trustee on your behalf. Court timelines dictate when the court approves motions, but you should anticipate you will wait at least 30 days before approval of any motion.

HOW YOU GET A REPLACEMENT VEHICLE

  1. MOTION TO MODIFY PLAN AND MOTION TO INCUR DEBT—In order to get a replacement vehicle for your “totaled” vehicle, and if you need any funds to help you get a replacement vehicle from the property damage settlement, your bankruptcy attorney should file two motion with the bankruptcy court: A Motion to Modify Plan and a Motion to Incur Debt.
  2. The Motion to Modify is what helps you buy a replacement vehicle. The Motion asks the bankruptcy court to reduce your bankruptcy plan (what you are having to pay your creditors) by what the insurance company paid to the finance company for your totaled vehicle. It will also ask the bankruptcy court to reduce your monthly Chapter 13 plan payments so you can afford a replacement vehicle. The Court usually allows this.
  3. In addition to the Motion to Modify, your attorney probably will file a Motion to Incur Debt. This Motion asks the bankruptcy court’s permission for you to borrow money to finance another vehicle. The Court will look carefully at how much your payments on the vehicle will be so it can make sure you can afford the vehicle you want to purchase.
  4. What about a down payment on your replacement vehicle? When your bankruptcy attorney files the Motion to Modify the Plan, the Court may allow you to use some of the insurance proceeds to pay down on the vehicle. This depends on how much debt is left to be paid in your plan.

So, if your car is totaled in a car accident, it isn’t the end of the world and you do have options. But, before you agree to anything or sign anything, talk to your bankruptcy attorney.

If you have been in a car collision that wasn’t your fault and you aren’t sure what you should do, Dennis and King are here to help you. We will take the stress away. Call us at (423) 892-5533. We can help, even if you don’t hire us.

By |2022-10-21T12:16:47-07:00October 26th, 2022|General Info|0 Comments
Personal injury attorneys - Cover of the the "know your rights after a serious car accident" PDF

FREE GUIDE

Your Rights After A Serious Car Accident

  • This field is for validation purposes and should be left unchanged.

Looking for more free resources to help you with your personal injury claim?

10 best attorney of 2021 in client satisfaction

$1,150,000

Auto Accident Settlement

$1,000,000

ATV Accident
Settlement

$650,000

Auto Accident Settlement

$600,000

Tractor Trailer Accident

$400,000

Tractor Trailer Accident

$300,000

Auto Accident Settlement

$300,000

Tractor Trailer Accident

$300,000

Auto Accident Settlement

$245,000

Motorcycle Accident Settlement

OUR SERVICES & REVIEWS

A personal approach to personal injury

Personal Injury

Car Accidents

Truck Accidents

Motorcycle Accidents

ATV Accidents

BICYCLE ACCIDENTS

BOATING ACCIDENTS

NURSING HOME ABUSE

PREMISE LIABILITY

“I would highly recommend Ms Dennis, she is very kind, and she listens to your concerns. And the staff is great also. My family and I can not thank her enough for her help during the lost of our love one. Thank you!”

TERESA BUCHANAN

“My experience with Dennis & king law was absolutely amazing she got me the money I need for my pain in suffering she was honest the entire way until time for me to settle. She checked on me to make sure I was doing fine… great outcome!!”

RAVEN DOLBERRY

“My experience with Dennis & King was overwhelmingly positive. I chose them when I was hurt in a car accident… I ended up getting a nice settlement in a matter of weeks…”

ZACHARY RUSSELL

OUR TEAM IS STANDING BY

Free Strategy Session

During your initial strategy session, we will assist you in creating a strategy in how to best pursue your claim, whether it be the result of a car accident claim, 18 wheeler injury, or, other kind of personal injury claim.

There are 5 points to your free claim strategy session:

  • First, we will listen to your story. You will have a chance to tell everything to someone who wants to hear what happened to you.
  • Based on the information you provide, we will give you our best advice on both what claims you have and the next steps you should consider to go forward with your claim.
  • If you claim is something that we think we can help you with, we will explain the services that we can provide for you, and what the next steps are that we should take. We will start working immediately.
  • If your matter is something that we do not think we can help you with, then we will attempt to put you in contact with another lawyer that might be able to help you.
  • Either way, what should happen is we will put to rest some of the unknowns that you may be experiencing. We will start to shed light on what you can expect and how to best pursue the benefits you deserve.