What will happen to my life insurance policy after filing for chapter 13? 15 Answers as of July 01, 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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Law Office of J. Scott Logan, LLC
Law Office of J. Scott Logan, LLC | John Scott Logan
Yes, but in Maine it is exempt only to the extent of $4,000. To the extent its cash out value exceeds $4,000, that value must be included in the amount you repay your unsecured creditors.
Answer Applies to: Maine
Replied: 7/1/2011
Ursula G. Barrios Law
Ursula G. Barrios Law | Guillermo Machado
Yes you can pay for life insurance.
Answer Applies to: California
Replied: 6/30/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
If term policy, just continue it.
Answer Applies to: California
Replied: 6/30/2011
Law Office of Harry L Styron
Law Office of Harry L Styron | Harry L Styron
You will retain the policy in a Chapter 13 if you complete the plan, and you will be able to make payments on it. If you file a Chapter 7, the cash value of the policy is exempt from seizure by the trustee up to a value of $9,700 or $19,400 if you are married. What this means is that if it is worth more than that then a Chapter 7 will seize and redeem the cash value, and give you the $9,700 or $19,400, whichever case applies, and pay the rest to creditors. But if it is worth less than that the trustee will not touch it.
Answer Applies to: California
Replied: 6/30/2011
Law Office of Maureen O' Malley
Law Office of Maureen O' Malley | Maureen O'Malley
Yes. You'll have to show the trustee whether there's any cash value in it, and if there is you may want to exempt it. If it isn't taken to pay creditors then you keep it and keep on paying into it.
Answer Applies to: Virginia
Replied: 6/30/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes, and in fact that is a specific deduction on the "means test."
    Answer Applies to: California
    Replied: 6/30/2011
    Stuart Jon Bierman  Attorney at Law
    Stuart Jon Bierman Attorney at Law | Stuart Jon Bierman
    Usually, a person can continue paying into a life insurance policy as long as there is no reason why the payments should stop. For example if it appears that it would adversely effect creditors then maybe there would be a reason for the Trustee or the Court to have an objection.
    Answer Applies to: New Jersey
    Replied: 6/30/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Generally, assuming that you have the money, yes you can continue to pay for life insurance in a Chapter 13. Beware though, if it is a whole life policy and therefore has cash value, it will be an asset of the estate (the cash value amount).
    Answer Applies to: Michigan
    Replied: 6/30/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Yes, but another issue is whether it is whole life or term and if it is whole life whether you can exempt the cash value. Bankruptcy is more complicated than just filling out forms. You may want to consider using an attorney to make sure the trustee does not take assets.
    Answer Applies to: California
    Replied: 6/30/2011
    Southern California Law Advocates
    Southern California Law Advocates | Norma Duenas
    Under bankruptcy laws you are allowed to take as a monthly expense, the payment you make for a term life insurance policy. Whole life insurance policies are for the most part not allowed as a monthly expense. If you have a term life insurance policy then you should be able to continue to pay it after filing.
    Answer Applies to: California
    Replied: 6/30/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Cash value of life insurance is an asset in bankruptcy. You can continue making payments for insurance after filing bankruptcy.
    Answer Applies to: California
    Replied: 6/30/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    Assuming that you are talking about a whole life policy, you may be able to contribute but it depends on a lot of things in your budget; ordinarily, the Chapter 13 trustee isn't going to give you "credit" as a deduction from disposable income for contribution to a whole life insurance policy.
    Answer Applies to: Indiana
    Replied: 6/30/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Yes, you can continue to pay your policy but you have to declare its cash value as an asset in Schedule B and exempt its cash value if possible. Only the portion of the premium that is for insurance is deductible. If it is a wholelife or universal policy or any other policy that is not a "term insurance policy" then the part of the premium that goes to build cash value is like putting that money in a savings account and it is not a deductible expense.
    Answer Applies to: California
    Replied: 6/30/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Quite possibly. This is a question your lawyer can answer for sure when he looks at your numbers. Don't even think about a pro se case. They almost always fail.
    Answer Applies to: Georgia
    Replied: 6/30/2011
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