Does Bankruptcy Affect a Life Insurance Policy?

If you are considering bankruptcy as a means to discharge your dead it’s likely that you have a series of common concerns and how it will affect your assets. From the cost of your home and your vehicle to your overall financial savings, bankruptcy could find a way into almost every area of your finances. Understanding how bankruptcy will affect your life insurance policy can be important as well. A life insurance policy often stands as the financial safety net for many families. It’s an asset that holds an incredible amount of value. Asking your bankruptcy attorney how your life insurance policy could be affected if you file for bankruptcy can be important before you petition for bankruptcy.

Financial information about your life insurance policy such as if it is a whole policy or term life policy can be important to understand how bankruptcy could change the way you file.

Many life insurance policies are exempted when you file for bankruptcy and this means that they will be protected from any garnishing from the bankruptcy trustee. You will need to disclose your life insurance policy as an asset on your bankruptcy request, but your attorney will likely work with you to take the appropriate steps so that you can exempt these items from your bankruptcy.

Failing to include a life insurance policy when you file for bankruptcy could result in the chance that the asset is not protected. Making sure that it’s included on your policy will make sure that you are committed to the process of filing your bankruptcy and that you do not find yourself subject to a charge of fraud.

If you are considering filing for bankruptcy but also have a life insurance policy protecting your family you must know the facts before filing. Contact our offices today to learn more about how to file for bankruptcy.

This post was written by Trey Wright, one of the best Bankruptcy Lawyers in Tallahassee Florida. Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.  This website contains links to other third-party websites.  Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.

Leave a Reply

Your email address will not be published. Required fields are marked *