Under any circumstances would cash value in life insurance not be exempt.
-Exemption Under NC law
-Would Fed law ever super cede exemption?
-Does the exemption include personal lawsuit?
-Should I be concerned with conflict of laws issues (which states exemptions will apply)? If so, how do I avoid these issues?
Does the exemption include personal lawsuit?
A: If you mean a lawsuit by a private creditor, then yes -- the exemption prevails.
If so, how do I avoid these issues?
A: To the extent that I have describe the potential exceptions, you cannot avoid the issue. You must arrange your debt avoidance efforts so that you are not subject to any of the exemptions (to the extent possible).
Please let me know if I can clarify my answer or further assist.
Hope this helps.
Thank you for the help. You have answered some of the specific concerns that I have but I will likely need more information. My question was, "Under any circumstances would cash value in life insurance not be exempt?" and I listed these subjects for clarity. Other information that would be of concern for further clarity would be greatly appreciated. I am also interested in seeing any case studies in relation to judgments.
P.S.- Could you please provide your experience and credentials?
Thank you for the help. You have answered some of the specific concerns that I have but I will likely need more information. My question was, "Under any circumstances would cash value in life insurance not be exempt?" and I listed these subjects for clarity. Other information that would be of concern for further clarity would be greatly appreciated.
A: Neither I nor anyone else can identify every conceivable set of circumstances under which the federal government may be able to reach life insurance proceeds, which are otherwise exempt under the NC Constitution Article X, Section 5, and N.C.G.S. § 1C-1601(a)(6). Bankruptcy, child support, spousal support, forfeiture of an instrumentality of a crime, federal tax liability, fraud in connection with the creation or maintenance of the policy -- e.g., premium payments made using money that was illegally obtained, or transferred to the insurer expressly to hinder, defraud or delay a creditor claim arising within four years of the date of transfer. I could sit here all day and probably come up with more possibilities -- but, there is a limit to how much time I can devote to any one question, and there isn't any scholarly treatise that has surveyed every possibility (even if there were, just because someone with learned credentials writes what they believe to be an exhaustive list of potential exceptions, doesn't mean that the author is correct). The law does not lend itself to absolutes. The only way to know for certain that a particular issue is covered, is to have a court issue a declaratory judgment.
I am also interested in seeing any case studies in relation to judgments.
A: Here are two bankruptcy cases of interest:
In re Romp, 249 BR 853 (USBC ED NC /6/13/2000)
In re Meyers, 483 BR 89 (USBC WD NC 11/14/2012)
A: You're welcome.
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