Legal Question in Bankruptcy in South Dakota

bankrupcy & death benefits

Are death benefits under life insurance policies protected from debtors and from bankrupcy court.

Case involves a filed bankrupcy. Individual died about 20 days prior to the closing of the bankrupcy.

Bankrupcy action was filed by both decedent and spouse.

Are death benefit payments excluded from such actions/debts?


Asked on 6/12/07, 4:12 pm

1 Answer from Attorneys
Jim Craig Craig Law Office

Re: bankrupcy & death benefits

If the proceeds were paid within 180 days of the date the case was filed, they are property of the estate. 11 USC 541(a)(5)(C). Otherwise, they are not.

Even if they are property of the estate, a spouse and children of debtor may still claim up to $20,000 of the proceeds exempt. SDCL 58-12-4.

Why are you not addressing your question to your bankruptcy attorney?

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Answered on 6/13/07, 7:46 am


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