Understanding handle homeowner's life insurance in bankruptcy.
Obtaining a homeowner's life insurance policy is a wise decision if you have a family. Such a policy ensures that your home is paid for in the event of your untimely demise. If you are contemplating a bankruptcy you can keep your house in the process, through a Chapter 13 repayment plan or a Chapter 7 reaffirmation agreement. You may wonder whether your homeowner's life insurance policy will remain in effect after bankruptcy.
Identification
At the start of the bankruptcy proceedings, advise the bankruptcy court trustee of both your desire to keep your residence and your plan to keep your homeowner's life insurance in force.
Considerations
Because your home is exempt in a bankruptcy case and you have the ability to keep the property by reaffirming the debt, the bankruptcy trustee likely will approve keeping the life insurance in force.
Misconceptions
A common misconception is that a debtor needs to eliminate expenses like life insurance policies. In fact, life insurance is a fiscally-wise investment for many debtors.
Size
In regard to a homeowner's life insurance policy, the bankruptcy court may limit any coverage beyond what is necessary to pay off the balance on the home mortgage loan.
Warning
Bankruptcy cases are complex. Consider hiring a lawyer to represent you in bankruptcy.
