Is there a way to protect my wife’s life insurance policy?

My wife has paid into her life insurance policy for 32 years. If she dies and I declare bankruptcy, will I lose the pay-out from her policy or is it better to file for bankruptcy before she passes?

One Comment

  1. It is definitely better to file before she passes on. You can exempt as life insurance and it’s cash value and any process under NYS exemptions. If your spouse dies within 180 days of the filing of your bankruptcy case, the proceeds become an “asset of the estate”. Based on my research of this issue in WDNY, it appears that life insurance cash value, avails and proceeds of any such policy are exempt from creditors. Still better to not have the issue arise and file your case before any spouse passes on, if you feel bankruptcy is your best option.

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