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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 30898
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Are all cash value of life insurance policies subject to creditors

Resolved Question:

Are all cash value of life insurance policies subject to creditors and are assets held in joint ten
subject to creditors when only one is filing
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 6 years ago.

You'll be able to retain a specified amount of the cash value that has accumulated within any permanent life insurance policies you own. Under federal exemptions, you can protect up $10,775 of a life insurance policy's cash value. Also, married couples may double all exemptions under the federal bankruptcy code.


As for the joint tenancy assets, only the interest held by the bankrupt person is subject to liquidation by the trustee. However, it is often impractical for the trustee to secure this interest in jointly owned property. For instance, the trustee would not seize and liquidate a debtors 1/2 interest in a car, a house, a boat, etc. Things likely to be liquidated would be a 1/2 interest in 100 acres of property, ownership of a company, etc.



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