You will probably be ok to use the funds to repair the car. However, you need to have your attorney check with Trustee Miller's office to be sure. Technically, these are assets of the estate. The Trustee may want your attorney to file a motion to use the proceeds formally with the court, or they may indicate that they have no objection to your use of the funds directly.
Better safe than sorry. Have your attorney check with the Trustee.
Attorney Jay Perez is a Managing Attorney with Macey Bankruptcy Law / Jacoby & Meyers-Bankruptcy, LLP, a national consumer bankruptcy law firm. His firm can be reached at 888-743-5787 or www.JacobyMeyersBankruptcy.com. Attorney Perez manages offices in Indianapolis, Merrillville, South Bend, Elkhart, Fort Wayne, and Lafayette Indiana. Attorney Perez is licensed to practice before the Supreme Court of Indiana, Federal District Court for the Northern District of Indiana, and the Federal District Court for the Southern District of Indiana. The private law firm of Macey Bankruptcy Law / Jacoby & Meyers-Bankruptcy, LLP is a debt relief agency helping people to file for bankruptcy relief under the bankruptcy code.
I agree with Attorney Perez and since he practices where you live, he should know how this sort of issue is handled in your district.
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I agree that you can probably use the money. In effect there is no impact on the ch 13 plan, The payment equals the damages. But I also agree that it is always better to shine a light on the situation and be pro active with the trustee. The Trustee should give your lawyer some guidance on how to document the situation. Sometimes, just an explanatory letter from your lawyer is enough. If the Trustee is going to give you a problem, better to know it up front. Good Luck.
This response is intended to give a general overview of the law and should not be treated as legal advice. There are too many factual issues and exceptions in the law to provide definitive conclusions about your circumstances.