Car Accident Settlement?

[wikkibird]

So, curious... we are in the middle of converting from a Chapter 13 to a Chapter 7. Pacer only still shows us as one month behind, so we are essentially waiting until the court figures out we are two months behind (didn't pay June or July because of hubby's loss of income in June). When the court files the dismissal, lawyer is notified, he files the conversion, etc.

However, in the middle of all of this....bam! Major car accident. Our car is totaled (last payment was made by the court in June, lol, irony) and hubby was seriously injured. A personal injury lawyer has been hired and we meet tomorrow with our bankruptcy attorney.

So, what happens if you get a settlement in a Chapter 13? What happens if you get one after you convert to a Chapter 7? I plan to ask these questions tomorrow, but I was wondering if anyone here has experienced either scenario.

Thanks!

[HHM]

You want to make sure you convert, DO NOT dismiss and refile. When you convert from 13 to 7, The filing date relates back to when you originally filed the chapter 13. So, this potential settlement is not an asset of your BK.

However, there are issues with your situation, so hopefully you have a lawyer that either knows the issues or is at least willing to do the leg work to figure it out.

[wikkibird]

You want to make sure you convert, DO NOT dismiss and refile. When you convert from 13 to 7, The filing date relates back to when you originally filed the chapter 13. So, this potential settlement is not an asset of your BK.

However, there are issues with your situation, so hopefully you have a lawyer that either knows the issues or is at least willing to do the leg work to figure it out.

Oh yes, we fully intend to convert (not dismiss, lawyer doesn't want to dismiss anyways). So yea, that was the main question was how it would be viewed, either as an asset or not. I mean, we also have to go car hunting in the next 72 hours as well! Our lawyer has worked with the personal injury lawyer we've chosen before, so that's also a benefit. Thank you!

[justbroke]

When I converted from Chapter 13 to Chapter 7, after being in the Chapter 13 for 20+ months, the Chapter 7 Trustee didn't care about any newly acquired assets. Your attorney should hopefully be able to navigate the issues that may occur, especially around the totaled car. Dealing with a totaled car isn't always easy and sometimes you need to do some procedural maneuvering (for instance, a Motion to Substitute Collateral or other practices). Since you are converting, this could affect your timing, but a good attorney can deal with this quite easily.

[HHM]

All in all, should be a non-issue.