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  1. #1
    Join Date
    Dec 2014
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    6

    Default Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    My question involves bankruptcy in the state of Texas:Life insurance and annuity proceeds, including cash value100%Ins. Code § 1108.001 and § 1108.51

    My husband passed away last 10 years ago. I' m inheritance $300k of the life insurance proceed. Can I keep when I file chapter 7 bankruptcy?

    Thanks

  2. #2
    Join Date
    Sep 2010
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    19,901

    Default Re: Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    Inheritance that is received more than 180 days before filing is exempted from the bankruptcy estate. A life insurance payout however is (though you may be able to exclude some of it necessary for living expenses). You'll have to recognize the difference. If you were paid as a beneficiary you have the latter. If the payment was made to the estate and you received it as an heir you have the former.

    In either case it will need to be reported and your attorney will advise you as to what degree it can be excluded.

  3. #3
    Join Date
    Oct 2006
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    16,474

    Default Re: Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    Quote Quoting Andydang
    View Post
    My question involves bankruptcy in the state of Texas:Life insurance and annuity proceeds, including cash value100%Ins. Code § 1108.001 and § 1108.51

    My husband passed away last 10 years ago. I' m inheritance $300k of the life insurance proceed. Can I keep when I file chapter 7 bankruptcy?

    Thanks
    I am confused. Did you get 300k cash 10 years ago when your husband died? Or did you inherit ownership of a policy with 300k cash value?

    If its the former, and its unspent sitting in a bank somewhere, its fair game.

  4. #4
    Join Date
    Dec 2014
    Posts
    6

    Default Re: Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    Yes, I received 300$ K from my husband's life insurance policy in last 10 years. I put it in a single/sole member FLP account. I did not use it. I'm afraid the trustee may liquidate when I file chapter 7 BK.

    - - - Updated - - -

    It was unspent and sitting in the sole member FLP account since I received it from last 10 years. I 'm wondering that can it be liquidated when I file chapter 7 BK?

  5. #5
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    Very likely yes. It is an asset. You are choosing not to pay your bills, which is different from not having the means to do so which is the purpose of a Ch 7.

  6. #6
    Join Date
    Sep 2010
    Posts
    478

    Default Re: Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    Andy,

    You have asked this question in various ways in several threads both on this forum and others. Might I suggest you stop trying to get answers off the Internet? You really need to sit down with a WELL QUALIFIED bk attny in your local area and go over all facts relating to the asset and bring to the meeting all relevant documents.

    Des.

  7. #7
    Join Date
    Dec 2014
    Posts
    6

    Default Re: Protecting Life Insurance Proceeds When Filing Chapter 7 Bankruptcy

    Thank you Des

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