Do I lose my life insurance policies?
I’m considering filing a consumer proposal or actually filing for bankruptcy. I owe about 70,000$, 25ish being student loans that I know I won’t be rid of, but due to ongoing health problems I can’t seem to get ahead of all the payments. Especially with meds costing over $250 a month and that’s with my work benefits. I earn around $50 a year but have dug myself into a hole being sick and off work for months at a time.
I have life insurances that began from a policy my mother took out when i was much younger that give me guaranteed insurabiliy. With my illness there is no way I could get life insurance again, so I want to know if in Ontario you can have life insurance policies exempted? The life insurances total about $60,000 and have less than 1000 in cash value.
Thanks.
If you file a consumer proposal you do not lose your life insurance policies. In a bankruptcy, you may lose the policy, or you may have to pay the trustee the cash surrender value of the policy.
The rules are complicated, and will depend on the terms of the policy. I suggest you contact a licensed trustee and have them review your policy before you make a decision.