Bankruptcy. does term life insurance with no value need to be listed as an asset on a chapter 7 petition?

Asked over 2 years ago - Riverside, CA

I am just wondering if it can be omitted since it has no value.

Attorney answers (6)

  1. Kristin Rose Lamar

    Contributor Level 7

    7

    Lawyers agree

    Answered . Hi, I agree with Ms. Bunce. Full disclosure is best. When you list it you can always put in the description portion that there is no value since it is term life.

  2. Dorothy G Bunce

    Pro

    Contributor Level 20

    8

    Lawyers agree

    Answered . List it anyway. You have nothing to lose by making a full disclosure.

    Hope this perspective helps!

  3. Walter C Oney Jr

    Contributor Level 17

    5

    Lawyers agree

    Answered . Best practice is to list it. Believe it or not, there are ghouls out there who will buy term policies from a bankruptcy trustee as a bet on the debtor dying during the term of the policy. Around here, the death benefit has to be $500,000 or more and the debtor has to be pretty old, but debtors aren't supposed to pick and choose what to list based on their own estimate of value.

  4. Jeffrey Chiao Hsu

    Contributor Level 4

    3

    Lawyers agree

    Answered . You need to list everything in which you have a present, future, or contingent interest. Not all attorneys do this, but I personally do and I think most attorneys agree that it would be good practice. It is actually what the bankruptcy code says every debtor must do, but in bankruptcy, oftentimes, consumers have few assets of value that the trustee can seize for the bankruptcy estate, and most trustees lack the incentive to point out where schedules were improperly filed in cases where errors and omissions have no tangible consequence. However, in potential asset cases, where things are improperly listed or were not disclosed, that is when federal bankruptcy judges write court opinions on such matters.

  5. Marc Gregory Wagman

    Contributor Level 17

    3

    Lawyers agree

    Answered . Yes you should list it in schedule B. And also if there is an exemption in your state for life insurance proceeds exempt it even though the value is likely $0 unless you pass away.

    The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The... more
  6. John K Lassen

    Contributor Level 20

    1

    Lawyer agrees

    Answered . List it nevertheless. Whenever anyone has a delayed or a denied life insurance claim, they should retain a life insurance lawyer to get them the proceeds they are entitled to. Here is a link for you www.InsuranceClaimLawFirm.com.

    John Lassen 1-877-252-4630

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