Bankruptcy Wizard
Okay, so as a pro se filer, I subscribe to the Bankruptcy Law Network's daily updates. Today, a nice nugget was found, and I performed some due diligence research to see just how nice this is.
Motion to Substitute Collateral
If you're in a motor vehicle accident and you total your car... this is yet another reason to have filed with a lawyer and not pro se.
It's not entirely common, but there are many times in which a skilled lawyer can get you a replacement car while you're still in a Chapter 13 Plan.
The lawyer does this by filing a Motion to Retain Insurance Proceeds and Substitute Collateral. So what does that mean?
Well, your skilled lawyer petitions the Court to keep the insurance proceeds to purchase a new vehicle, and then to assign the lien to the creditor whose collateral was destroyed (by the accident).
That should keep everyone happy. Right?
Not necessarily. There is some caselaw out there which points to some underlying issues, and it may not be that easy. Certainly, the creditor needs to be on board, or they'll just want the entire proceeds, and may fight you for it. It's about the right to the proceeds and if you do get a creditor who wants to litigate this, they'll argue that the proceeds are not property of the Bankruptcy Estate. (See In Re: DARRYL HUFF, 04-40055-JTL, Middle District of Georgia, Columbus Division.)
I don't think all lawyers will do this, and the fee schedules from several Districts indicate that the reasonable cost to prepare and submit such a Motion is $350.
Something to think about if you total your car during your Chapter 13.
Disclaimer: this appears to differ by District.
Motion to Substitute Collateral
If you're in a motor vehicle accident and you total your car... this is yet another reason to have filed with a lawyer and not pro se.
It's not entirely common, but there are many times in which a skilled lawyer can get you a replacement car while you're still in a Chapter 13 Plan.The lawyer does this by filing a Motion to Retain Insurance Proceeds and Substitute Collateral. So what does that mean?
Well, your skilled lawyer petitions the Court to keep the insurance proceeds to purchase a new vehicle, and then to assign the lien to the creditor whose collateral was destroyed (by the accident).
That should keep everyone happy. Right?
Not necessarily. There is some caselaw out there which points to some underlying issues, and it may not be that easy. Certainly, the creditor needs to be on board, or they'll just want the entire proceeds, and may fight you for it. It's about the right to the proceeds and if you do get a creditor who wants to litigate this, they'll argue that the proceeds are not property of the Bankruptcy Estate. (See In Re: DARRYL HUFF, 04-40055-JTL, Middle District of Georgia, Columbus Division.)
I don't think all lawyers will do this, and the fee schedules from several Districts indicate that the reasonable cost to prepare and submit such a Motion is $350.
Something to think about if you total your car during your Chapter 13.
Disclaimer: this appears to differ by District.
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