Will the funds from the life insurance be exempt if I file for bankruptcy? 11 Answers as of August 01, 2011My father is ill with terminal cancer, he has placed me as one of the beneficiarys on his life insurance, but I am currently in Chapter 13 bankruptcy. Will my funds from the life insurance be exempt, or should I be worried about it being taken?
Financial Relief Law Center | Mark Alonso
You should contact your attorney who filed the chapter 13 on your behalf and find out from that person how exactly this would impact your petition and the payments. You will probably need to disclose this to the court, which may or may not impact your current bankruptcy plan and may or may not be exempt.
Answer Applies to: California
Lewis Adams and Associates | Lewis P. Adams
In Utah, life insurance proceeds received on the death of a relative is exempt only if the beneficiary is the spouse or child of the Bankruptcy debtor (UCA 78B-5-505(xi)). Proceeds from your father's insurance, would not be protected in your Chapter 13 Bankruptcy.
Answer Applies to: Utah
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
In Indiana, funds paid during a Chapter 13 from a life insurance contract are not part of the bankruptcy estate.
Answer Applies to: Indiana
Law Offices of John J. Ferry, Jr. | John J. Ferry, Jr.
The bankruptcy trustee could try (and most likely will try) to get the funds added to the pool to pay creditors, unless you have sufficient exemptions to exempt the funds. If the money is intended to cover his funeral expenses, you may be able to get the trustee to back off. Talk to your bankruptcy attorney about this.
Answer Applies to: Pennsylvania
Braunstein Law, PC | Jacob Braunstein
Under Oregon law, the beneficiary of a life insurance policy is entitled to the proceeds of the policy as against the creditors of the policy holder unless the policy holder and beneficiary are the same person. However, insurance proceeds are generally not exempt from the creditors of the beneficiary. Under the Bankruptcy Code, if a debtor receives (or becomes entitled to receive) life insurance proceeds within 180 days of filing bankruptcy, those proceeds are included in the debtor's bankruptcy estate and subject to liquidation. Consequently, if a debtor receives or becomes entitled to receive life insurance proceeds after 180 days after filing bankruptcy, the proceeds should be exempt.
Answer Applies to: Oregon