Bankruptcy Discharge Archives - Page 8 of 33

Bankruptcy Proposals and Your Life Insurance Policy

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Bankruptcy Proposals and Your Life Insurance Policy

When you file a Proposal, your Trustee who acts as the Administrator of your proposal will ask you for a copy of your life insurance policy. He is doing this to determine if the life insurance policy is a term insurance policy (no cash value) or a whole life policy (possible cash value). It is very unusual for a proponent (the debtor who files the proposal) to offer to the creditors any part of the cash value of an insurance policy. There is, however, the requirement to inform the creditors if there is any cash value to an insurance policy. In this way, the creditors have full disclosure of your assets and liabilities when they vote on accepting or refusing your proposal.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Can bankruptcy take life insurance money?

Posted on March 1, 2015June 20, 2023 by Jordan Rumanek

When you initiate a bankruptcy proceeding, your appointed Bankruptcy Trustee will ask you for a copy of your life insurance policy. This is not an invasion of your privacy, but rather a necessary step in the process. They want to ascertain whether it is a term insurance policy or a whole life policy that might possess a cash value. The trustee’s role is to determine if this cash value is part of your insolvent estate without compromising the rights of the beneficiary of your life insurance policy.

Should you nominate your “estate” as the beneficiary, the trustee would normally extract the cash value or propose an option for you to reimburse the amount the trustee would have obtained if they had accessed the cash value. Rest assured, your trustee will not invalidate your life insurance policy. With your cooperation, the insurance provider and your life insurance broker may remain unaware of your bankruptcy filing.

Another aspect of concern for your trustee revolves around the situation if you were to pass away while your bankruptcy is still not discharged and your estate has been designated as the insurance policy beneficiary. In such a case, the policy proceeds would be directed towards your trustee. They would first allocate funds for your funeral and testamentary expenses, following which, the balance would be distributed among your creditors, post the deduction of the trustee’s fees and charges. Any residual funds would be transferred to the executor of your estate.

Life insurance policy bankruptcy

Will I Lose My Job If I File For Bankruptcy

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Will I Lose My Job If I File For Bankruptcy?

The simple answer is “no”! Your employment cannot be terminated because you filed an Assignment in Bankruptcy. Your employer is not even notified that you filed for bankruptcy. The only exception to this is if your salary is being garnished. The trustee can stop the garnishee but must disclose his authority under the Bankruptcy and Insolvency Act to do so. To be discreet, the trustee usually sends a notice via Email only to the head of human resources or the payroll department. To help the trustee if you have a pay garnishee, you should get the Email and name of the person at your company who the trustee will work with to stop the garnishee.

You might consider turning a negative into a positive. Immediately after signing the papers to file your bankruptcy schedule a meeting with your employer. Tell him that you have had some financial difficulties and he/she must have noticed that you have not been working at 100% of your ability. Your employer probably has not even noticed anything but he will still agree with you. Tell him you are being proactive about the problem and have filed for bankruptcy. Your mind will now be clear of your financial problems and you will be a much more focused and better employee for the company. You should be pleasantly surprised at the reaction you get for being honest and upfront. Our recommendation is to ask for more responsibility or work so that your next performance review will be better than in the past.

Student Credit Card Debt

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Student Credit Card Debt

University students will often receive unsolicited and/or pre-approved applications for credit cards. Perhaps financial institutions specifically target students to apply for credit cards? It is a tempting offer for someone on a tight budget who needs the extra cash for books, pub night or a pizza delivery. The cards usually have a low limit of about $1000.00 so it is not a “big deal.”

However, banks are not targeting students to be “nice”. They want to be the one of the few credit cards that you have in your wallet because after you graduate and start your career the card limit can be increased. In the meantime, financial institutions rely on students only making small or minimum monthly payments on balances. Not only do students usually only pay minimum payments, they also don’t usually think about the extra interest they are paying on top of the original balance. In other words, financial institutions make more money from minimum payments each month. Be cautious, look at the interest rate and look beyond the advertised low introductory rate.

We live in a “plastic society.” There is nothing wrong with having a credit card for emergencies and for large cash purchases. Just make sure that you stay financially responsible, pay off your monthly balance every month and use credit wisely. Be financially responsible now and you will reap the financial rewards in the future.

Stay Financially Savvy.

Category: Bankruptcy Discharge

Bankruptcy Proposals and Your Life Insurance Policy

Bankruptcy Proposals and Your Life Insurance Policy

Can bankruptcy take life insurance money?

Life insurance policy bankruptcy

Will I Lose My Job If I File For Bankruptcy

Will I Lose My Job If I File For Bankruptcy?

Student Credit Card Debt

Student Credit Card Debt

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