Bankruptcy Question & Answer Forum - Canada

Author:		Dar
Date:		September 29, 2005
Question:		After considerable attempts to stay ahead of creditors and due to very unusual circumstances, I was forced to declare bancruptcy. My son passed away tragically, shortly after I filed. I was so very overwhelmed and in such a state of pain that I could not function, I quit working and moved out of the house where he died. I was aware thet there was a life insurance policy that I had purchased for a form of savings for him. I informed the insurance agent of my son's death and told him I was in bancruptcy. He told me that he believed the insurance was exempt. I informed my trustee of the insurance and after researching he also told me that life insurance is exempt and is not included on the monthly statements. At the time of my discharge, a different trustee in the same office, told me that the money should have been included and now that the money is gone, the original trustee is attempting to take me to court. I am greatly distressed...can you please tell me if life insurance is exempt? Thank you.
From:		Bruce, Alger & Associates Inc.
Date:		September 29, 2005
Answer:		This a very complex question and you should seek legal counsel to determine your position as it is a very fact sensitive situation. Having said this, it is my view that your proceeds constitute after acquired property which a trustee must take some overt action to recover. Given the particular facts of your situation, there will be arguments both ways as to whether at this point you are required to pay a portion or all of the funds to the Trustee. Bruce Alger phone: (403) 296-2970 balger@alger.ca