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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Insurance Policies

I just filed for bankruptcy and my trustee took photo copies of two insurance policies of which I am the owner. Both polices are whole life, one has $0.00 accummulated above the insurance value, the other has $18,000.00 value, but is locked in for ten years due to a non redemption clause. Will my trustee and or CRA still try and redeem the cash value? (If they do and the insurance company refuses based on the contract I signed with them, will the insurance company likely cancel my life insurance).

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One Response to “Insurance Policies”

A licensed trustee said...

The applicable insurance laws vary somewhat by province. If your “estate” is the beneficiary of your policy then your trustee will likely be able to cash it out for the benefit of your creditors. If someone else is the beneficiary (your spouse or parents for example) then the policy may be protected under provincial law.

If you are concerned about what is going to happen you should contact your trustee and ask them to explain to you what they are doing and what options you may have if it turns out the policy can be cashed out by your trustee.