When you file bankruptcy, there are numerous categories of Exemptions that people can use to protect their assets. One of the categories concerns life insurance.
If you have a term life insurance policy, you list it and it will be exempt. However, when it comes to life insurance policies with cash values, you need to be careful. There are dollar limits on the different Exemption categories.
The good news is, if you have to file bankruptcy in Washington State, state exemptions allow you to keep your individual or group life insurance policy. Federal exemptions also allow you to keep life insurance policies and payments.
Washington State bankruptcy exemptions include:
Federal exemptions also include disability, illness or unemployment benefits, life insurance payments from a person you depended on for support, life insurance policy loan value up to $12,250, and unmatured life insurance contracts.
In Washington State, you’re allowed to choose between state and federal exemptions, so depending on what kind and how large your benefit is, and what other assets you hope to keep, you can decide which exemption to take.
Over the past 31 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.