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  1. #1
    Join Date
    Oct 2010
    Posts
    2

    Default Can Trustee Take Car Insurance Settlement

    My question involves bankruptcy in the state of: Ohio. My Ch.7 bankruptcy was discharged in December 2009. The trustee has not yet closed the case. Last week, my car was totalled (not my fault), and insurance will pay me the value of my car. Can the trustee take this amount? How long will the trustee control my money?

  2. #2
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Can Trustee Take Car Insurance Settlement

    Since your case has not been closed, unless the Trustee did a specific abandonment for the vehicle, if the proceeds from the insurance exceed your allowed vehicle exemption, after payment of any liens, then the difference may need to be turned over.

    You need to verify the allowed exemptions both in the vehicle and insurance proceeds resulting from damage to the vehicle. You need to discuss this with your attorney. If you do not have an attorney you need to find one to protect your rights.

    Des.

  3. #3
    Join Date
    Oct 2010
    Posts
    2

    Default Re: Can Trustee Take Car Insurance Settlement

    Thanks! The damage to the car was over $9000. The car is worth about $10,800, and I owe about $2700. The car fell within the exemption at the time of bankruptcy filing, due to the amount that I owed. So -- the trustee has the option to take the difference, leaving me with nothing to put down on a new car, and a sub-prime interest rate, too?

  4. #4
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Can Trustee Take Car Insurance Settlement

    Since I do not know your state's exemptions I cannot be sure. If this were my state, the pecking order would be as follows:

    1. Lien holder gets paid in full
    2. Debtor gets the allowed exemption amount
    3. Anything left over goes to the Trustee

    Des.

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