Whole life insurance ploicy redemption

[JustOverBroke]

Hi All,
I have a question on redeeming the cash value on a whole life insurance policy.

My wife and I filed chapter 7 on July 7th,2009 our 341 is on August 24,2009 we filed under the federal exemptions and we live in Wisconsin.

I have a cash value whole life insurance policy that the cash value is about $3300.00.

Can this Policy be redeemed without any recourse from the trustee or the bankruptcy court?

Our Lawyer told us that any money we made after the filing was ours to keep does this hold true if I were to redeem this policy?

We haven't done anything with it yet as we unsure of the consequences of this action.

We had a few things come up unexpectedly that really cleaned us out(lawyer charged us an extra $504.00 to do a means test if you can believe it.)and we had an expensive car repair to take care of.

I hope someone can help me out on this one I'm really strapped right now and this cash would give us some relief.

Thanks to all.

[kw1025]

i am pretty sure you life insurance policies are exempt to a certain extent. You want to look up what the laws are in your state. I think Wisconsin is exepemt onlu until about $800. You may want to tread carefully with this

[AngelinaCatHub]

LIfe insurance and annuities and the annuity payout is exempt. Now if you cash in the policy, you now have a lump sum. I am not sure on this, but if you are beyond your 341, and you use this for expenses to survive, I don't think you will have any problem. 'Hub

[LuciluS]

I know you don't want to see this Post LOL!

I'm sure this policy was listed in your Bankruptcy forms as Exempt. Once you cash in an Exempt it becomes Income & schedules would be need to be amended. I don't think you want to cash in this policy until after your 341 which is in Aug.

I fully understand you need Cash Now! But, remember, you will be asked at your 341 hearing if anything has changed since you filed your BK papers. However, Call your Attorney and see what he has to say. Who knows what he/she will say

Luci

[AngelinaCatHub]

I know you don't want to see this Post LOL!

I'm sure this policy was listed in your Bankruptcy forms as Exempt. Once you cash in an Exempt it becomes Income & schedules would be need to be amended. I don't think you want to cash in this policy until after your 341 which is in Aug.

I fully understand you need Cash Now! But, remember, you will be asked at your 341 hearing if anything has changed since you filed your BK papers. However, Call your Attorney and see what he has to say. Who knows what he/she will say

Luci

I agree. I did not pick up that our OP did not have her/his 341 yet. They need to wait. 'Hub

[JustOverBroke]

I know you don't want to see this Post LOL!

I'm sure this policy was listed in your Bankruptcy forms as Exempt. Once you cash in an Exempt it becomes Income & schedules would be need to be amended. I don't think you want to cash in this policy until after your 341 which is in Aug.

I fully understand you need Cash Now! But, remember, you will be asked at your 341 hearing if anything has changed since you filed your BK papers. However, Call your Attorney and see what he has to say. Who knows what he/she will say

Luci

Luci,
Actually I do want to see you're post as not to mess up my BK.

It's just not the answer I wanted to hear.

But thou shalt not touch!!!

Is there any safe time that I can cash it out after the 341 meeting of creditors but before discharge without causing myself any problems? Anyone????

I just don't want to mess my BK up and I will not either, I just need a little relief ASAP and this would help greatly but I won't do it at the expense of messing up my case.

Another question is when would it be safe to redeem this policy?

Would I be able to redeem it after the 341 but before discharge?

I will not do anything stupid just looking for options.

Thanks everyone for you're responses.

[LuciluS]

Luci,
Actually I do want to see you're post as not to mess up my BK.

It's just not the answer I wanted to hear.

But thou shalt not touch!!!

Is there any safe time that I can cash it out after the 341 meeting of creditors but before discharge without causing myself any problems? Anyone????

I just don't want to mess my BK up and I will not either, I just need a little relief ASAP and this would help greatly but I won't do it at the expense of messing up my case.

Another question is when would it be safe to redeem this policy?

Would I be able to redeem it after the 341 but before discharge?

I will not do anything stupid just looking for options.

Thanks everyone for you're responses.

If you don't have any communication with your Attorney until the 341, I would ask him after your 341 hearing. I think he/she will say it's okay to redeem the policy, but ya never know.

I email my Attorney about every 2 weeks with questions & returns promptly with his answers. I agreed with him, takes less time to send an email than making a phone call. However, if you wan't to find out before 341, call him/her and ask.

I'd have the redemption papers for the policy, completed with a SASE envelope & take it with you to 341. If the Attorney says you are good to go, drop that paper in the mail, so you can get your money as soon as possible.

Luci