How will Chapter 7 Bankruptcy affect my life insurance? 6 Answers as of April 12, 2016

I have a Universal Life Insurance Policy through a company which is a Fraternal Benefit Society. The Cash value of the policy is $4,700 with a death benefit of $85,000 and the beneficiary is my Fiancee. The value of all my assets fall below the exemption limits. Will I be forced to surrender the full value and lose my insurance?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If the cash value is exempt you have nothing to worry about. If you are using the "wildcard" you can apply any unused amount to life insurance.
Answer Applies to: California
Replied: 4/12/2016
A Fresh Start
A Fresh Start | Dorothy G Bunce
If you are eligible for the Nevada exemptions, there are multiple ways to protect this asset. If no exemption is available or you fail to claim the available exemption, a Chapter 7 Trustee will cash in the policy and use the money to pay your debts.
Answer Applies to: Nevada
Replied: 4/11/2016
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
I don't see any problem here. If you or your lawyer ? are careful to exempt the cash value of your life insurance, and the cash value is well below the exemption amount, then it is highly unlikely he that any person can make trouble about your keeping it. Good luck.
Answer Applies to: Wisconsin
Replied: 4/11/2016
Ronald K. Nims LLC | Ronald K. Nims
It depends on where you live. Each state has the option to choose the exemptions for their residents or to use the Federal exemptions. Ohio has an unlimited exemption for the cash value of life insurance when the beneficiary is your spouse or children. So, in Ohio, if you marry your fiancee, the cash value of your insurance is exempt. Ohio has a tiny wildcard exemption, which can protect only a fraction of the cash value if you don't get married before you file. Most other states have a more generous wildcard exemption which would cover the entire case value of the policy.
Answer Applies to: Ohio
Replied: 4/11/2016
Law Office of Michael Johnson
Law Office of Michael Johnson | Michael Johnson
No it will be exempted. Florida Statute 222.14 allows for cash value to be exempted also.
Answer Applies to: Florida
Replied: 4/11/2016
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