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dylatess, Attorney
Category: Bankruptcy Law
Satisfied Customers: 5156
Experience:  37 plus years of experience specializing in bankruptcy law
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In CHAPTER 7 bk, are the cash values of life insurances, considered

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In CHAPTER 7 bk, are the cash values of life insurances, considered assets?
Will they be taken by the trustee. Note: the cash values can be taken anytime
by the insured, I suppose. The CV are $15,000.00 and $3,000.00. i am concerned, the trustee might take them.
Over 34 years, I have assisted my clients with debt problems having filed more than 32000 Chapter 7 and Chapter 13 Bankruptcy petitions.

What state do you reside?
Customer: replied 4 years ago.

I live in Illinois. Are the cash values exempted under IL or Federal laws?

When you file BK, you must make an election to choose either the federal or state exmeptions and you choose whichever are the most favorable to you. In your case, you would choose Illinois as you can exempt up to $18000 in a combination of personal property. However, that includes the cash values of the policies. AS a result, the trustee could claim the values. But in all cases, so that you do not lose the policy by having it cashed out, if your exemptions exceed $18000, he will write you a letter offering you to pay the excess amount to the court to be used to pay the creditors something that is owed to them. AS such, if you have $21000 in personal property, you would need to write a check for $3000 to keep your assets. Finanally, the short answer is that the cash values are not exempt but the goal is to list them and hopefully, alolng with your other assets, you will not be too much over the allowed exmeptions. thanks for understanding.
Customer: replied 4 years ago.
,I am very satisfied with your answer. i will rate you. One more Q pls..On schedule J, No. 13, can I include all credit card monthly payments? I remember one trustee telling me not to ever include them there. So, far, that was the only trustee who told me. And I think he is wrong. Thanks counsel.
He is correct. Shedule J, item 13 is where you list regularly scheduled installment payments like a car. That is you only list payments where you pay the same amount each month which is different from your credit cards as the minimum montly payment changes every month.
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Customer: replied 4 years ago.
,Follow up Q pls. Same scenario. Another exemption is the homestead of $15,000.00 for one spouse. Can the debtors waive (not take advantage of this exemption) so they can claim exemption for the cash value of the policy.This is of course assuming that there is no equity on their house. Thanks.
Sorry. This is not a follow up question. Please post. Likewise you can request me to answer it.

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