vehicle in chapter 13 totaled

[bossman]

So I am in chapter 13 and one of the vehicles in my chapter 13 got total the insurance company wants to send the check to the lien holder. Meanwhile the Attorney says there is a 5 to 6 weeks process that must take place to determine what happens with the check. My question is will they go by the lien holders claim amount or will go by the principal owed

[justbroke]

There's no way to tell. Generally speaking, the insurance payoff should equal the remainder of the claim value. If not, the original lender (that filed the claim) may likely have their claim reduced. There's also another way to deal with this which is called Substitution of Collateral. That's used when you're getting a replacement vehicle and the insurance check doesn't cover the original claim.

The reason it takes so long is because everyone has to agree on what you're doing with the money. For example, if you use the proceeds of the loan to buy a new vehicle, then what happens to the old original claim? This is where the Substitution of Collateral can come into play.

It can be a little complex so that's why it takes several weeks.