Without more information, your question cannot get a short and simple answer.
When you filed bankruptcy, did you know that you had life insurance money coming to you? If so, then the anticipated life insurance proceeds should have been disclosed on Schedule B, with the applicable exemption stated on Schedule C.
If you did not disclose the anticipated life insurance proceeds in your schedules, then you may have a problem for not disclosing all assets.
However, you may be able to solve that problem by amending your schedules. Amend Schedule B to disclose the life insurance proceeds; Schedule C to apply an exemption to protect the insurance proceeds; and also amend the Summary of Schedules.
Consult with local bankruptcy counsel immediately. If you are not represented by counsel, then see if there's a bankruptcy clinic in your area.
There is a factual question of when you filed, and when the policy was triggered. The rule is that if you obtain an interest in an inheritance, property settlement or insurance proceeds within 180 days of filing your bankruptcy petition, such property becomes part of the bankruptcy estate. That means that the trustee can administer the assets, unless you can exempt them. I highly reccomend that you consult with counsel to discuss the facts of your case, and to see if you fall within this exception. I put a link to my colleague Gary Fraley who is located in Sacramento. Good luck.
This information is not, nor is it intended to be, legal advice. This does not constitute the formation of an attorney-client relationship. You should consult an attorney for individual advice regarding the specifics of your situation. JC Law Group is a debt relief agency. We help people find relief by filing bankruptcy in California under the Bankruptcy Code
You absolutely need to consult with an attorney as soon as possible to determine what exactly you need to do and if you are able to keep the proceeds or need to turn the proceeds over to the trustee in your case. Failure to do anything could be construed as a bankruptcy crime, so make sure you get some assistance to handle the situation immediately.
Best of luck to you and my condolences on your loss.
The short is it depends on when he died. If he died before you filed, you had to disclose the life insurance and could lose it all. However, if he died after you filed, but within 180 days of the filing, then you must disclose it to the court (and the trustee). You may be able to protect some of it, but the rest will be forfeited to the bankruptcy estate. If there is money left, your case will become an asset case and the trustee will send notices to the creditors for them to file Proofs of Claim. If there is not enough money, the remaining debt is discharged.