Car Accident

[Reddrocket07]

Im 1 year into my 13 and I recently was involved in an accident that totalled my car at no fault to my own. in total, im getting $9k from the other person's insurance company. The insurance payment will cover the cost of my loan for the car and also provide me with $2k left over. My lawyer said I have the following options: Option #1 Pay off the vehicle and petition the court for the remaining balance of the pay off to purchase a vehicle. Option #2 Pay off the vehicle, request permission from the court to have the remaining balance plus incur new debt and finance a new vehicle. The lawyer provided me with a reputable lending company to do that which is local. Finally, Option #3 petition the court and lein holder of my totalled vehicle to use the insurance funds to purchase a new vehicle and provide my current lein holder of my totalled vehicle with the means to put the new car up for a lein during the duration of my 13. Anyone have suggestions/opinions on what I should do? I am going to get another $2k-$4k back in medical settlement as well.

[SMinGA]

I've never heard of option #3. The 2nd one seems the most common/reasonable, unless you believe you can get a decent vehicle for $2000. But then, the trustee might want to increase your payment to your plan if you're no longer making a car payment.

[justbroke]

Finally, Option #3 petition the court and lein holder of my totalled vehicle to use the insurance funds to purchase a new vehicle and provide my current lein holder of my totalled vehicle with the means to put the new car up for a lein during the duration of my 13.

This is called a Motion to Substitute Collateral. These are not so simple, but if your attorney knows how to do these... it's a GREAT way to handle this issue. The mere fact that your attorney knows about the Substitute Collateral, to me, means that s/he is a well seasoned bankruptcy attorney.