What will happen to my life insurance policy after filing for chapter 13? 15 Answers as of July 21, 2011

I have been paying into it since I was 35 (10 years ago). Can I still make payments into it after filing?

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Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
Perhaps. It will depend on your plan payment and disposable income. Please speak with a Bankruptcy Attorney for an answer based on your particular circumstances.
Answer Applies to: New Hampshire
Replied: 7/21/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
Nothing if term policy, otherwise may have to sell equity in it.
Answer Applies to: California
Replied: 7/20/2011
Ursula G. Barrios Law
Ursula G. Barrios Law | Guillermo Machado
Yes.
Answer Applies to: California
Replied: 7/20/2011
The Law Office of Marvin Wolf
The Law Office of Marvin Wolf | Marvin Wolf
Regarding life insurance. Financial planners love to sell life insurance like it's a great planning tool - but "it ain't necessarily so." Most life insurance is "term" life and has no cash surrender value for a trustee to go after. For "whole" life or "universal" life, there is a savings component added from which you can borrow - it is called "cash surrender value". This CSV has value to a trustee, so a debtor would need to exempt it. The good news is also bad news - life insurance CSV is a lousy paying investment that takes a long time to add up to anything, so a debtor's exemption will usually protect it.
Answer Applies to: New Jersey
Replied: 7/20/2011
Apple Law Firm PLLC
Apple Law Firm PLLC | David Goldman
The life insurance policy will be evaluated just like other assets. Generally Term policies do not have a value and are not assets. If the policy has a value, there are various issues that will need to be looked at like how long you owned it and what the value is to see if it will be exempt or not. Sometimes if the policy is not exempt, you may be able to use and exemption under state law to make it or part of it exemption.
Answer Applies to: Florida
Replied: 7/20/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    A life insurance policy remains in effect upon filing bankruptcy. You must continue to make the payments. If there is cash value in the policy it must be claimed exempt in order to keep the cash value from the trustee.
    Answer Applies to: California
    Replied: 7/19/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You can keep your policy but you need to declare as an asset the cash value of the policy and exempt it.
    Answer Applies to: California
    Replied: 7/19/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Nothing will happen to it. You can keep paying into it.
    Answer Applies to: Connecticut
    Replied: 7/19/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Yes you can continue to make the payments, assuming that you have the money. You need to make sure that you exempt the cash value if the policy is a whole life.
    Answer Applies to: Michigan
    Replied: 7/19/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes, that is a specific deduction on the means test.
    Answer Applies to: California
    Replied: 7/19/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    It will depend on whether it is a whole life or term policy. If it is a term policy then there is no cash or surrender value so you will not lose it. If it a whole life type policy then you must be able to exempt this value. If you can then you're fine.
    Answer Applies to: California
    Replied: 7/19/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Probably yes. An attorney would need to see your whole budget, all your assets, and details on your policy to tell you for sure (and the insurance payments may affect your plan payments).
    Answer Applies to: Georgia
    Replied: 7/19/2011
    Ray Fisher Law Offices
    Ray Fisher Law Offices | Ray Fisher
    nothing as long as you continue to pay for it. If you stop paying for it then it will be cancelled just like it would if you did not file. Are you in bankruptcy now? If so talk to your lawyer about this.
    Answer Applies to: Texas
    Replied: 7/19/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If you have the money for it.
    Answer Applies to: Virginia
    Replied: 7/19/2011
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