Need help how to answer this one!!

[bkrelief22]

Okay...filed ch13 Oct. 2008. I had a loan on a life insurance policy that was included in the bk. I received a letter from the company asking for the payment and interest (it comes yearly). I then wrote them and gave them the bk case number and also my lawyers info and number.

Just received a letter from them saying that it is a life ins. contract and they are NOT the creditor...if I neglect to pay the premium, ins would lapse and coverage terminate. They said they had no record of the bankruptcy and if I wish to submit the paperwork they would make a note in my file.

Question...exactly which paperwork should I send...I already gave them the case # and district info where it was filed. My lawyer is pretty well non existent. I did send them a copy of the first letter from the ins. co.

Thanks so much for all your help!!

bk22

[HHM]

The life insurance company is correct, they are not a creditor, when you borrow from a 401K, IRA or Life Insurance Policy, you borrowed money "from your self". If you want to keep the policy from lapsing, you must pay them.

It is just that simple.

[bkrelief22]

I understand that i must pay if I don't want it to lapse...I just wanted to know what paperwork as far as the bk did I need to send. I've already given them the case # so did I need to send anything else?

[OHBOY]

bkrelief22,
it's just the way HHM already replied: you borrowed monies from YOURSELF, therefore you don't need to file any bk papers with the life insurance, but as the life insurance already pointed out: if you want to send them bk papers, oh well...

If you don't repay the loan that you made to yourself.... (out of your own money), all that happens is what the life insurance already pointed out to you, namely: your policy will lapse and you loose any additional money that you may have accumulated in your policy.

Just my humble opinion...

[bkrelief22]

Thanks ohboy and hhm...I get it...I finally understand that because I borrowed from myself...that it will lapse and since I borrowed what it was worth...it's a break even for me.

Thanks for all your help

bk22

[HHM]

Basically, from a BK perspective the money you borrowed from your life insurance is NOT A DEBT, so it does not become part of your BK.

Strictly speaking, you shouldn't have to pay it back, per se, but you would need to start paying premiums. I suppose it depends on how the policy is structured. But generally, with whole life policies, the policy stays active so long as you keep paying the premiums.

[bkrelief22]

Thanks again HHM, for all your help!!

bk22