Free Consultation

attachement of Life insurance after death of a personal bankruptcy

What happens to the Bankruptcy on death? Ror example, If a bankrupt parent dies and there are insurance policies with minor children listed as Beneficiaries,are they subject to attachement?

Posted from: Ontario

One Response to “attachement of Life insurance after death of a personal bankruptcy”

A licensed trustee said...

Your second question first – if the children are the beneficiaries and they have not also filed for bankruptcy then the insurance proceeds should flow directly to them. The only life insurance proceeds that are seized in a bankruptcy are those payable to the bankrupt (or the bankrupt’s estate).

In regards to your first question, what happens upon the death of the bankrupt, it depends how far into the process the deceased was. If they are far enough along the deceased’s estate might still be entitled to a discharge from bankruptcy. If they are not far enough along then it is likely the bankruptcy will never be completed (since the bankrupt is dead and cannot complete the process).