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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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Life Insurance

If I transfer ownership of my life insurance policy to my son prior to declaring bankruptcy can he be made to transfer it back or cash it in, as to become part of my assets? Could there be any other adverse impact of this action?

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One Response to “Life Insurance”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

I would not recommend this course of action as it would cause you substantial difficulty during the course of the bankruptcy. This type of act would be considered either a fraudulent preference or a fraudulent conveyance, your trustee would be required oppose your discharge as you were not acting in good faith or with due diligence, the court would leave you in bankruptcy for as long as it deems necessary and may require you to reimburse the estate the equivalent value of the life insurance or potentially grant a judgment against your son for the same value. It is never a good idea to make any last minute transfers as the are easily discovered and the consequences can be severe.