Car Accident - What is the Chap 13 process

[Jman30]

I am currently in the 13 month of a 48 month Chapter 13. Two weeks ago, I was in a car wreck and the car was totaled by the insurance company. This car is in the Chapter 13 (blue book value). The insurance company is paying me blue book for the car, just over $2,500.

How will this work? Does the insurance company work through my lawyer to give the money to Ford Credit to pay off the loan? Do I see any of this money? I think the $2,500 is more than the value of the car at this point (13 months of payments on the chapter 13) so where does the difference go?

Anyone have any experience with this?

Jason

[StaciMM]

This would be good to speak to your attorney and/or the trustee. I'm not sure how they'll treat the old loan/insurance payment, but you'll probably need to petition for permission to take on new debt, to buy a used car.

[Jman30]

Yeah, that is the thing. The whole point of this is to AVOID debt, not take on new debt. The last thing I want is new debt, whether the Trustee approves it or not.

I was hoping to get the check for the car to buy a used junker until the BK is over in a couple of years, but I don't think that is happening.