My Wife Died During Chapter 13

[planescrashing]

Good grief, I really don't know how much more I can take. My story is this wife started business with shaddy franchisor. Ended up getting in lawsuit and lost the case in mediatioin. We then had to file chapter 13 because of our income didn't allow chapter 7. Ok fine... We submitted our chapter 13 plan it was approved and we've been paying about 1 year and 6 months. We'll everything seemed to be on the road to recovery and my wife decided to take her life. We both have a term life insurance policy that was listed at the time of our chapter 13. For some reason under our exemption i see only my life insurance policy and it states FL law Stat. Ann. 222.13. I don't see my wifes policy listed. What I'm trying to find out from anyone here is three things:
1. Do i have to report this possible insurance policy to my trustee since it's past the 180days since I filed?
2. Or can I just not report it and finish making my payments over the next year and a half.
3. Can the trustee take all of the insurance policy to pay my creditors and make me continue paying my payments for the next three and half years?

Please help with my questions if you can.

[deadbroke99]

I don't have an answer as I am new to all of this but I did want to say that I am so sorry for the loss of your wife. I can't imagine what you must be going through!

I would call your lawyer right away to see if he can give you any advice...good luck!

[paradise lost]

My thoughts are with you. Very sorry for your loss.

[BKOnce]

In every case like that, most news paper sources report that insurance companies will likely scrutinize and carefully investigate any "foul" plays (if any) between husband-wife couples (& after police investigation of cause of deaths), so it may take a while before insurance company can reimburse them any million dollars policy claim. Am I right?

[planescrashing]

they have already determined No foul play and i have death certificates. Not quite sure you read my question?

[justbroke]

First, I'm sorry for your loss.

1. Do i have to report this possible insurance policy to my trustee since it's past the 180days since I filed?

Yes.

2. Or can I just not report it and finish making my payments over the next year and a half.

No, the 180 days doesn't apply to Chapter 13, as you are obligated to commit all disposable income over the term of the Plan to the Trustee.

3. Can the trustee take all of the insurance policy to pay my creditors and make me continue paying my payments for the next three and half years?

This is the interesting area. There is nothing which prevents them from doing this. The death benefit is exempt. However, the proceeds are not for you because they are only exempt from decedent's creditors. Since this would now be your money in your Estate, it is subject to claim from your creditors (not hers).

If the business deal was not jointly guaranteed and only she guaranteed that debt, then you could be okay? Are you in a 100% Plan?

Does that make any sense? That's how I understand it to be.

Sorry, I have more questions than answers. I haven't dealt with anything like this. You are asking the right questions, though.

Is your lawyer still around? Are you the only beneficiary?

[HHM]

Bankruptcy Rule of Procedure 1016 provides the following:

Death or incompetency of the debtor shall not abate a liquidation case under chapter 7 of the Code. In such event the estate shall be administered and the case concluded in the same manner, so far as possible, as though the death or incompetency had not occurred. If a reorganization, family farmer's debt adjustment, or individual's debt adjustment case is pending under chapter 11, chapter 12, or chapter 13, the case may be dismissed; or if further administration is possible and in the best interest of the parties, the case may proceed and be concluded in the same manner, so far as possible, as though the death or incompetency had not occurred

As for the insurance policy, I don't know off the top of my head. You may want to consider (A) simply dismissing the case if that will be in your best interests, (b) seeking a hardship discharge of your chapter 13 (i.e. an early discharge).

[justbroke]

I like the early (hardship) discharge possibility myself.

[planescrashing]

First, thanks for the sympathy and feedback this has been a sureal situation for me and my 5-year old. What i'm really confused about is we listed our policies as assets on the petition. We then listed our policies on schedule 'C' exemptions and it states my policy amount and the exempt amount referencing FL statute 222.13. For some reason her's isn't listed on the schedule C. Not sure if that was on purpose or accident on attorneys part, or if it even matters. If one's exempt shouldn't the other be as well because of this fl statute?

I'm not sure if i'm in a 100% plan were would I find that? I believe i'm paying .25 cents on the dollar. I'm the only beneficiary unless i die then it is to go into a trust for our daughter.

If I don't report this to the trustee and continue paying until the plan completes in three years so I could utilise the money for me and my daughter after the plan is complete what recourse am i facing and frankly how will the trustee find out. I didn't think they gave a rats bottom as long as I continue making my payments. I don't plan on spending any of it until after the plan is complete.

[chloe0724]

I am so sorry for your loss. I lost my father to suicide when I was 19. It's a harder loss to process. I hope all the best for you and your son.

[justbroke]

First, thanks for the sympathy and feedback this has been a sureal situation for me and my 5-year old.

Again, so sorry for you and your child.

I would recommend what HHM posted. You should be seeking a hardship dismissal of your case! I'd do this as soon as I could. Speak with your attorney about it. I don't see any reason why your case should be continued given the situation.

[planescrashing]

Since I live in florida would this case law be similar to my situation? thanks for reviewing:

http://pacer.flmb.uscourts.gov/pdf-new/57328734.pdf

[justbroke]

Since I live in florida would this case law be similar to my situation? thanks for reviewing:

http://pacer.flmb.uscourts.gov/pdf-new/57328734.pdf

I like Judge Paskay. I've read many of his opinions and he is very smart.

First, the ruling is pre-BAPCPA of 2005. I don't think that really matters, as that part of the code (regarding hardship) didn't really change as part of the BAPCPA.

If you can prove a hardship by having a basis for not having to commit some or all of the proceeds of the life insurance policy to your Plan, then I think HHM's suggestion would work.

However, my original thoughts on this are now more clear. The Trustee may go after the proceeds.

[planescrashing]

the trustee could have it ALL just give me a discharge so I can try to pick up the pieces.

[justbroke]

the trustee could have it ALL just give me a discharge so I can try to pick up the pieces.

I wish you the best. I'm sorry that we can't give you an answer with any finality.

As you had posted yourself, the Trustee will probably attempt to get the money. If it's enough to payout your Chapter 13, that may be a good thing since you can get your fresh start, earlier.

Please let us know what happens.