Once the case is closed you can definitely withdraw from the life insurance policies. If the discharge was entered but it is an "asset" case then you would want to get permission from the trustee to withdraw, although if it is exempt it is likely that the trustee won't care.
Yes, you can withdraw the $3K. If you exempted the cash value of your insurance you are entitled the a larger exemption, but if $3K is the maximum cash value you can withdraw, you should be OK. I agree with my fellow lawyers.
You could have withdrawn it soon as the Trustee filed a no report of distribution, which would have been shortly after the meeting of creditors.
I am very sorry to hear about your ongoing financial distress. Were you represented by an attorney in connection with your chapter 7 case? If you handled the bankruptcy yourself (in pro per) then it's understandable that you have questions.
Generally, if some asset was claimed as exempt during the bankruptcy (and no objections were made to the exemption), it is yours, and once the bankruptcy is closed, there are no restrictions on liquidating that asset to pay expenses or a debt.
Once the car issue has been resolved, you may want to contact the IRS to work out a payment schedule, or to see if they will hold off on collection efforts until you once again have employment and income. If you are your wife are both unemployed and truly scraping by, you should be able to reach an agreement with the IRS, at least temporarily. If you do nothing, they will take action including levying funds in bank accounts and placing a lien on your real estate.
This answer is for general information purposes only and is not legal advice. No attorney-client relationship is intended or formed by the posting of this answer. Law Office of Lisa J. Espada * San Francisco, CA * (415) 504-6195