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*Unsecured debt includes credit cards, lines of credit, bank overdrafts, payday loans, and unsecured personal loans (excluding student loans). It does not include mortgages and car loans.

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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 Super Intendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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I understand that Bankruptcy-Canada.ca does not provide debt relief services directly and agree to securely share this information with a local Licensed Insolvency Trustee (LIT) for a free, confidential consultation.

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Will the Licensed Insolvency Trustee take a life insurance policy?

Will the Licensed Insolvency Trustee take a life insurance policy after the client has passed on when it’s assigned to a beneficiary?

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One Response to “Will the Licensed Insolvency Trustee take a life insurance policy?”

Doug Stuive, CA | Trustee | CIRP said...

Whether or not a trustee can take proceeds from a life insurance policy depends on who is the beneficiary on the policy. There are some preferred beneficiaries that protects the policy from seizure and some that are not. If the beneficiary is a spouse, parent, child or grandchild, then should the bankrupt pass on, the funds usually cannot be seized by the trustee. If the death benefit is paid to the “estate of the deceased” then the proceeds are paid to the bankruptcy trustee. However, if the beneficiary is a sibling, friend or other party, then the bankruptcy trustee may have an interest in the proceeds depending on who is the “owner” of the policy. If you are concerned about this you speak to your trustee before signing and bring a copy of the insurance policy for their review.