Q: Can the trustee of Chapter 13 take money from insurance company after my neighbors house exploded totaling out my house?
I filed Chapter 13 Bankruptcy in January of 2019 and have been making payments. In May of 2019 my neighbors house exploded condemning my house unlivable. The insurance company paid out $115,000 to repair the house totaling it out and said if I tear it down and rebuild it they will give $25,000 more for one that is much smaller or buy another to replace it. I filed a motion to sell the house for the amount owed on the mortgage and use the money to buy a replacement house. The trustee did not respond so the motion was granted by the judge. The trustee then ignored that, took the mortgage out of the insurance money, paid it off and said whatever I sold it for, he takes for the creditors. I filed a motion to leave the house paid off and use the rest of the money for repairing the house and the trustee objected because I am receiving much more than what the house was worth when I filed and wants to take $62,000 out leaving me with the house and $8,000 to repair it. No room for more detail..
A: You need a bankruptcy attorney ASAP to clean this up for you and to protect your interests. The trustee shouldn’t be able to hijack all your money from the house.
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