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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 17499
Experience:  B.A.; M.B.A.; J.D.
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My son had a house fire, during the process of fire inspection

Customer Question

My son had a house fire, during the process of fire inspection they found drug related items and arrested him. He is currently in jail pending trial/plea bargaining. I am now power of attorney for him. The insurance has paid his claim but he has creditors who I am currently trying to negotiate settlements with. His wife passed away 3 years ago, and he went into a downward spiral. Eventually lost his job, still owes child support and creditors. Is his house insurance proceeds available to creditors? Can I open an account in another bank in my name and deposit the check. I am currently trying to negotiate with the credit card companies, only 2 left but big ones. He also owes us about $20000.00. We have been helping him pay bills and lent money to him to stop foreclosure on his house (which then burnt down a month later, ironic). Who has the right to that money 1st. I am hoping to keep some of that money so when he gets out of jail he will not feel hopeless and start using drugs again.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 1 year ago.
Hello: This is PhillipsEsq. I am a licensed Attorney and I will be assisting you today.
My son had a house fire, during the process of fire inspection they found drug related items and arrested him. He is currently in jail pending trial/plea bargaining. I am now power of attorney for him. The insurance has paid his claim but he has creditors who I am currently trying to negotiate settlements with. His wife passed away 3 years ago, and he went into a downward spiral. Eventually lost his job, still owes child support and creditors. Is his house insurance proceeds available to creditors?
Response 1: No. The proceeds are for repairing the damages caused by the fire.
Can I open an account in another bank in my name and deposit the check.
Response 2: No. You cannot deposit the check in your account because the check is not in your name. I will be shocked if your bank allows you to deposit the check in your account unless your son has endorsed the check over to you.
I am currently trying to negotiate with the credit card companies, only 2 left but big ones. He also owes us about $20000.00. We have been helping him pay bills and lent money to him to stop foreclosure on his house (which then burnt down a month later, ironic). Who has the right to that money 1st. I am hoping to keep some of that money so when he gets out of jail he will not feel hopeless and start using drugs again.
Response 3: The proceeds are for repairing the damages caused by the fire and NOTHING else. I still do not understand why you are using the insurance proceeds received for fire damage to the house to pay other debts that are not related to the fire.
Customer: replied 1 year ago.
The house is a total loss and needs torn down. Payout not enough to rebuild. Mortgage was paid off by insurance company, insurance co gave money to city to tear down(per city ordinance) etc. He has destroyed his credit so no way for him to get a loan to rebuild. Even after he gets out of jail. So does that effect how the money can be treated by creditors.
Also one of the larger bills has already filed suite and there is a judgement on file in the county courts. My understanding is that they can put a lien on his property to recover the amount of judgement, but since house burned down only thing left is lot. So wondering if they can take the settlement?
Expert:  Phillips Esq. replied 1 year ago.
The house is a total loss and needs torn down. Payout not enough to rebuild. Mortgage was paid off by insurance company, insurance co gave money to city to tear down(per city ordinance) etc. He has destroyed his credit so no way for him to get a loan to rebuild. Even after he gets out of jail. So does that effect how the money can be treated by creditors.
Response 1: Thank you for the clarification. I will amend my previous response #2. See if he can endorse the check over to you so that you can put the money in an account for him. My concern is that your bank may not take the deposit even with the endorsement.
Even after he gets out of jail. So does that effect how the money can be treated by creditors.
Response 2: No, it does not.
Also one of the larger bills has already filed suite and there is a judgement on file in the county courts. My understanding is that they can put a lien on his property to recover the amount of judgement, but since house burned down only thing left is lot. So wondering if they can take the settlement?
Response 3: They cannot take the settlement because the settlement is for his house and not to settle other debts. So, you need to make sure that the money is put in a safe place for the house.

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