chapter 7 bankruptcy

[sitzpak1]

What is the name of your state? Wisconsin. My wife & I filed bankruptcy in late Nov '-04. Hearing was held mid-Jan '-05. Took 5 minutes. Attorney called in another to represent me and he asked if I had life insurance policy? Told him yes. He said - don't die within 6 months. Proceeds will go to creditors. Is this correct?

 

[Ladynred]

Well.. maybe. Depends on whether or not there's a clause in your policy that specifically states the benefits cannot be used to pay your creditors. If not, then the lawyer is right, but that's 6 months from your FILING date - your'e almost there already.

 

[giggle50]

That last guy is wrong. It doesn't have anything to do with the policy.

Proceeds from life insurance, or inheritance within 6 months of filing are assets and can be liquidated by the chapter7 trustee

 

[Ladynred]

Sorry giggle.. but there IS such a clause that is often included and in many states it IS upheld by the Trustee or specifically exempt !

.. and I'm NOT A GUY !!

 

[spoiler]

Wisconsin exemptions state:
815.18(3) (I) (a)

Life insurance proceeds held in trust by insurer, if clause prohibits proceeds from being used to pay beneficiary’s creditors.

sitzpak1
Ladynred is right. And she helps many, many a people on this site and knows what she is talking about. Listen to her advice