Legal Question in Bankruptcy in California
Bankrupted Lienholder and wrecked trailer
My driver wrecked his tractor and trailer. There is a lien on both tractor and trailer. The lien holder for the trailer did a chapter 7 bankruptcy. There is a $30,000 insurance payout for the trailer. Who gets the insurance money for the trailer?
1 Answer from Attorneys
Re: Bankrupted Lienholder and wrecked trailer
The lienholder, in a Chapter 7 bankruptcy, transferred all of its assets to a "bankruptcy estate." That estate is administered by the Trustee assigned to the case. The insurance company needs to forward that payout to the trustee. I would not suggest that you attempt to keep it as the Trustee will eventually want either the trailer, in good condition, or the money back from you when you stop paying the loan.
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