Contact your attorney and tell him what you want to do. If you don't have one, contact the Trustee and see what he has to say. You may want to consider the fact that the Trustee can take some of the money and pay the debts for you. That way you get your discharge and no one can come back later and claim you owe them more. Just a thought.
You really need to talk to an attorney. The life insurance proceeds may be exempt. If so, why not finish the Ch 7 and discharge your debts? Its difficult to dismiss a Ch 7.
The life insurance proceeds automatically become the property of the bankruptcy estate (if you, the debtor, are the beneficiary of those proceeds) and are currently in a bankruptcy case.
You will need to file a motion to dismiss. This is not an automatic right in a Chapter 7 case. Talk with a Bankruptcy attorney before you make any decision regarding dismissing your case.
I cannot tell from your e-mail if you have converted to a 7, or thinking of doing so. Normally you can dismiss the 13 without any problems. But, you cannot dismiss the chapter 7 without a court order. Talk to a competent bankruptcy attorney before moving forward.
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