Instructions to Insurance Companies and Lienholders for Dealing with a Claim While a Customer is in Chapter 13 BankruptcyOur office receives many calls on this issue however it is not a complicated process. In fact, it is almost 100% the same process as a regular claim for a customer that is not in bankruptcy.If you are an insurance company or a lien holder that has a client who is in a Chapter 13 case in the Northern District of Georgia here is the process for processing this claim: You are NOT waiting on a court order or a “letter” from the trustee or the judge on this matter. They don’t issues these because there is no reason. You need to process this claim LIKE ANY OTHER CLAIM.The client will report the claim and then the insurance company needs to determine what will be paid on the claim.If money will be paid out the insurance company then the INSURANCE COMPANY (NOT the trustee or the customer’s bankruptcy attorney) needs to contact the LIEN HOLDER directly to make the payment on the balance due. The LIEN HOLDER will have that information. You don’t need to call the debtor’s attorney or the chapter 13 trustee. You need to contact the LIEN HOLDER.Once the balance that is owed is paid to the LIEN HOLDER if there is any money left over you need to send that to the customer’s Chapter 13 Trustee. If the customer wants to retain any of that money they can make that request through their attorney. THAT is what the customer’s Chapter 13 Bankruptcy Attorney does in this process. THAT IS IT.If you are LIEN HOLDER, once the insurance pays off your claim in the bankruptcy case you need to WITHDRAW your claim since you have been paid for your debt. Otherwise you are claiming a right to payments which you are not entitled to and will have to disgorge any overpayments. THIS IS THE INSURANCE COMPANY AND LIENHOLDER'S JOB. IT IS NOT THE CUSTOMER'S BANKRUPTCY ATTORNEY OR CHAPTER 13 TRUSTEE'S JOB TO DO ANY OF THIS FOR YOU! IF WE HAVE TO COMPEL YOU TO DO YOUR JOB WE WILL SEEK ATTORNEY FEES FROM YOU FOR THIS NEGLIGENCE BECUSE YOU ARE CAUSING UNDUE DAMAGES TO OUR MUTUAL CLIENT SUCH AS LOSS OF TRANSPORTATION OR HOUSING.