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Life Insurance
Hello Listservers:My client has a life insurance policy where she is the insured and policy owner. However, as part of a loan agreement, she assigned the proceeds to the bank. The loan was for purchase of a medical practice; the medical practice shut down and the bank foreclosed on its assets and sold them.The client now has a discharge in bankruptcy, wiping out the loan. The assignment of proceeds is still in place, however, and will be until the bank notarizes a release of the assignment.Do I have standing and leverage to ask the bank to release the assignment? Or is this something that is more like a lien, which survives bankruptcy?- John D. Faucher818/889-8080
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Advance Warning: This is a long one.
I have a client that received 50K in life insurance benefits when his spouse passed away 6 months ago. He might also receive another 30k in two months.
703.140(b)(11)(C) exempts the proceeds of life insuranceto the extent reasonablenecessary for the support of the debtor.
Two questions:
(1) The code requires the debtor to be a dependent of the dead individual. Can a spouse be a dependent of another spouse in the context of life insurance? I know dependent does not mean beneficiary.
(2) Do future law schoolexpenses count as reasonably necessary expenses? He has been admitted to Southwestern.
If I can'tget the life insurance exempt this way,can I wait until he pays his first semester expenses, about 23k, and then file bankruptcy. What ifhe prepays both semester's tuition in August? Is that being too greedy?
Thanks
Sina
Advance Warning: This is a long one.
I have a client that received 50K in life insurance benefits when his spouse passed away 6 months ago. He might also receive another 30k in two months.
703.140(b)(11)(C) exempts the proceeds of life insurance to the extent reasonable necessary for the support of the debtor.
Two questions:
(1) The code requires the debtor to be a dependent of the dead individual. Can a spouse be a dependent of another spouse in the context of life insurance? I know dependent does not mean beneficiary.
(2) Do future law school expenses count as reasonably necessary expenses? He has been admitted to Southwestern.
If I can't get the life insurance exempt this way, can I wait until he pays his first semester expenses, about 23k, and then file bankruptcy. What if he prepays both semester's tuition in August? Is that being too greedy?
Thanks
Sina
The post was migrated from Yahoo.