In Re Watkins

MEMORANDUM OPINION

JACQUELINE P. COX, Bankruptcy Judge.

Background and Procedural History

Evelyn Watkins, a chapter 7 debtor since May 15, 2003, purchased a 1999 Chevrolet Malibu (the “Malibu”) on August 31, 1999, only to have this vehicle stolen and totaled five months later. GMAC, the lender who financed her purchase of the car and retained a purchase-money security interest in it, had required Watkins to contractually agree to purchase physical-damage insurance, which she obtained in September 1999 from National Heritage Insurance Company (“National”). The policy listed both Watkins and GMAC…