Legal Question in Bankruptcy in Nevada

Nevada law provides quite a few exemptions from creditor executions. One of them, which may be pertinent to you, reads:

"All money, benefits, privileges or immunities accruing or in any manner growing out of any life insurance, if the annual premium paid does not exceed $15,000. If the premium exceeds that amount, a similar exemption exists which bears the same proportion to the money, benefits, privileges and immunities so accruing or growing out of the insurance that the $15,000 bears to the whole annual premium paid."

Deposit those funds into a bank to whom you owe money, and -- whoops -- it may be gone, per the bank's right of setoff, nothwithstanding the legal exemption. A bankruptcy trustee might also claim otherwise exempt insurance proceeds, if they have been comingled with other funds in a bank or other financial account.

Your attorney can explain further.

As Paul indicated, life insurance proceeds are usually not taken by a Bankruptcy Trustee, but you may need to be concerned about what might happen before you file your Bankruptcy. That is why it can be so important to consult with a Bankruptcy attorney early on rather than after you have made certain financial decisions that cannot be undone.

I am more concerned about whether Bankruptcy is the right choice for you and whether it will give you the help you are looking for.

Unless you have a second mortgage on your home, Bankruptcy might not be necessary for you unless you also have a substantial amount of other debt.

Good luck & feel free to contact my office.