Life Assurance Policy & Bankruptcy

Bankruptcy & life insurance coverage

During bankruptcy, if you have a life assurance policy that is jointly held - by a spouse, for example - they are likely to have an interest in the policy. It is recommended that you get in contact with your trustee and see how the interest should be dealt with. If you are a lone bankrupt it is normally your trustee that can claim the interest that you have in your life assurance policy. The trustee may also be able to sell or surrender the policy and collect any proceeds on behalf of your creditors.

If you want your life assurance policy to continue, you should speak to your trustee. It may be possible for your interest to be transferred for an amount equivalent to the present value of that interest. Also, if the policy has been charged to someone for an endowment policy - used as security for a mortgage, for example - the creditor’s rights will not be affected by making a bankruptcy order. Any other existing value in the policy, however, may belong to your trustee.

A quick guide to bankruptcy

Bankruptcy is a tough experience. When someone is made bankrupt, their possessions, home, income, in fact all their assets are used to pay their outstanding debts.

Declaring yourself bankrupt

When an individual realises that they are about to go, or perhaps have already gone, bankrupt it can be hard to know where to go or what to do.

Bankruptcy solicitors

Facing bankruptcy can be a frightening experience. There are many complications involved that may leave you feeling confused and not knowing where to turn. Having a solicitor to guide you through the process can bear huge benefits.