Problems have arisen in several Chapter 13 cases in regards to Orders allowing the Substitution of Collateral (actually authorization to use insurance proceeds from a wrecked vehicle to purchase a different vehicle). In those cases neither the debtor, debtor’s attorney nor the seller of the new vehicle followed through with the notation of lien of previous lien holder on the new title or delivered the title to that creditor.

For that reason, Judge Waites requires use of a form order which more clearly requires the debtor’s attorney to ensure the proper notation of lien, delivery of title and transfer of insurance proceeds.

Judge Waites does not require the form be used when counsel for both the debtor and prior lien holder settle an objection to substitution of collateral, however, he recommends it.