{"id":2808,"date":"2019-10-12T16:56:29","date_gmt":"2019-10-12T16:56:29","guid":{"rendered":"https:\/\/recoverylawgroup.com\/?p=2808"},"modified":"2025-08-06T06:24:07","modified_gmt":"2025-08-06T06:24:07","slug":"what-happens-to-your-insurance-policies-during-bankruptcy","status":"publish","type":"post","link":"https:\/\/recoverylawgroup.com\/staging_D\/what-happens-to-your-insurance-policies-during-bankruptcy\/","title":{"rendered":"What Happens to Your Insurance Policies During Bankruptcy?"},"content":{"rendered":"

Call: 888-297-6203<\/a><\/strong><\/p>\n

People who are on the verge of the bankruptcy filing are often worried about their life insurance policies. This is something, they simply cannot afford to lose. Dallas based bankruptcy law firm<\/a> https:\/\/recoverylawgroup.com\/staging_D\/ lawyers say that generally your life insurance policies are not considered a part of your bankruptcy estate. However, in case, they are included in your bankruptcy estate, there are exemptions available to protect them. Whether the insurance policy becomes a part of your bankruptcy estate depends on which type of insurance policy it is. Another important consideration is who is the beneficiary of your policy?<\/p>\n

Term life insurance<\/strong><\/p>\n

This type of insurance has no cash value while the insured is alive. On the death of the insured, the beneficiary gets the proceeds. Since no money is involved until the insured\u2019s death, there won\u2019t be any available to disburse to the creditors. Hence, this type of insurance policy is not considered a part of the bankruptcy estate.<\/p>\n

Whole life insurance<\/strong><\/p>\n

This type of insurance has a cash value attached to it as you can borrow against it after a specified time has lapsed (as mentioned in the policy). It becomes a part of your bankruptcy estate as it can be cashed to pay your debts. In case the beneficiary of the policy is your child or spouse, it might not become a part of the bankruptcy estate. Federal exemptions can protect up to $12,250 of the cash surrender value of the policy.<\/p>\n

Receiving insurance benefits in bankruptcy<\/strong><\/p>\n

If anyone who has listed you as a beneficiary of Term Life or Whole Life Insurance dies, and you are during bankruptcy, then the money could possibly become a part of your bankruptcy estate. In case you receive any life insurance policy benefit within 180 days of the bankruptcy filing, the proceeds become a part of your bankruptcy estate and are used to pay your creditors. However, using estate planning techniques, you can protect the money you received in case of bankruptcy. in case you have a life insurance policy or are the beneficiary in someone else\u2019s insurance policy, it would be beneficial if you consult with experienced lawyers regarding their fate in bankruptcy proceedings. To find out if life insurance will be part of your bankruptcy estate or you can save it, you can consult with experienced bankruptcy attorneys at 888-297-6023.<\/p>\n\n

\n

<\/p>

    <\/ul><\/div>\n
    \n
    \n<\/fieldset>\n
    \n
    \n<\/span>\n<\/div>\n
    \n<\/span>\n<\/div>\n
    \n<\/span>\n<\/div>\n
    \n<\/span>\n<\/div>\n<\/span>\n