When Should You Take Insurance off of Surrendered Property in bankruptcy in Minneapolis
If you are planning on surrendering secured property in your bankruptcy case, it likely has crossed your mind as to when you should take the insurance policy off.
When you surrender property in bankruptcy, it likely will not happen the same day as filing. In a chapter 7 case, if you intend to surrender property before the 341 hearing, you will need the case trustee’s okay. Otherwise, you could wait until after the 341 hearing. In a chapter 13 case, you most likely will need to wait for the confirmation of the plan stating there will be a surrender of the property or a Motion for Relief is granted for the creditor. In either case, you will want to keep your insurance policy on the property until the creditor has picked it up. This is because even if you intend to surrender the property, until the creditor has it, it is your responsibility.
What you wouldn’t want to happen is your bankruptcy case is filed, it lists the property as surrender, you take your insurance off and then a natural disaster or other event out of your control damages the property. You may be on the hook for this damage, since it is post-filing the case and there was no insurance to cover the claim.
If you plan to surrender property in your bankruptcy case keep in contact with your attorney for when the property can be picked up by the creditor. When the property is picked up and out of your hands, then you should be able to take the insurance policy off of it.
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