QUESTION
Will my bankruptcy effect my life insurance policies?
Asked on Jan 29th, 2013 on Bankruptcy - Michigan
More details to this question:
I have about $65,000 in credit card debt. I lost my job may 2012. My only assets is a 2002 Honda and 2004 Acura.
13 ANSWERS
Bankruptcy Attorney serving Cleveland, OH
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Benson Law Firm
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Determining whether your life insurance policies will be affected by your bankruptcy filing depends on what kind of policies you have. If you have term policies, then there should be no effect at all. However, if you have whole life or universal policies, it will depend on who the beneficiaries are.
Answered on Feb 04th, 2013 at 7:03 PM
Daniel James Wilson
Bankruptcy should not affect your insurance policies unless they are whole life. If they are some of the value may be non-exempt. You also might have a problem with too much car value. Consult an attorney.
Answered on Feb 01st, 2013 at 4:05 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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It is possible. Please understand that filing for bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.
Answered on Feb 01st, 2013 at 1:01 AM
I can't see how it could, but I suppose stranger things have happened. If your Insurance company checks your credit, they could raise your rates. I have no idea how they would justify it though.
Answered on Jan 31st, 2013 at 10:06 PM
Life insurance policies and benefits are exempt under Nevada law. However, the premiums on many insurance policies are determined by someones credit scores, so unless your rate is locked in, you might find that your premiums will go up after filing bankruptcy. You might need to be more concerned about losing one of your vehicles, unless you are married and file bankruptcy jointly. The exemptions only allow you to claim one vehicle, not two.
Answered on Jan 31st, 2013 at 9:37 PM
Complex Litigation Attorney serving Costa Mesa, CA
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Thomas Vogele & Associates, APC
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Assuming you file a Chapter 7, you are allowed to retain your life insurance policies if they are term policies. Under federal bankruptcy exemptions, you may retain up to $11,525 of cash value in whole life policies (anything over that would be turned over to the Chapter 7 trustee). Under the California exemption scheme, you may protect up to $11,800. An attorney can help you decide which exemption scheme to use based on the nature and extent of your assets.
Answered on Jan 31st, 2013 at 8:13 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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It depends on your state. If your life insurance policies are exempt under your state law, then no bankruptcy will not affect them.
Answered on Jan 31st, 2013 at 8:09 PM
Deborah F. Bowinski
You don't say what sort of life insurance policies you own. If there is cash value in the policies then some of that value may be subject to your trustee/creditors' claims. What is protected is governed by the state exemption provisions and those vary significantly from one state to the next. You shod consult with an attorney to evaluate your situation and to help determine whether you have any non-exempt (unprotected) value in the policies. If your policies are merely term ones then there would be no problem.
Answered on Jan 31st, 2013 at 7:23 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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No, life insurance is exempt unless a cash value, then it can be counted toward your personal exemption.
Answered on Jan 31st, 2013 at 6:49 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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Depends if they are whole or term.
Answered on Jan 31st, 2013 at 6:41 PM
Bankruptcy Attorney serving Seattle, WA
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Henry & DeGraaff, PS
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That depends in part on what exemptions are available to you. In Washington, we can choose from either the Washington State exemptions or the federal exemptions. Depending on who the beneficiary is, you may be able to exempt some or all of a whole life policy. Term life insurance has no cash surrender value so you don't need to worry about exempting it.
Answered on Jan 31st, 2013 at 4:26 PM
Most likely, no, but it would depend on what type of policy you have.
Answered on Jan 31st, 2013 at 4:25 PM
Bankruptcy Law Business Attorney serving Asheville, NC
Partner at
Pitts, Hay & Hugenschmidt, PA
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Are you married? Are the cars owned jointly? Cash value life insurance should be ok, but the value of the cars may be an issue.
Answered on Jan 31st, 2013 at 4:25 PM