My mum-in law is retired and has quite a bit of debt. She'd like to go bankrupt but has a whole life assurance policy with a surrender value. At the moment she's making token payments, which is fine but I guess there's always the chance her creditors could make her bankrupt. What happens if she cashes in the policy now? Will she have to declare it if they make her bankrupt? What would they do about it (I think it's worth a couple of grand)? Thanks for any info.
on your statement of affairs mum must list any policy that she has recently surrendered
if she declares BR and still has the policy the OR will take it for the benefit of creditors.
Mum can use the policy to pay for bankruptcy court fees, proffessional advice ( accountant , solicitor or bankruptcy expert) with the remainder going to the OR.
if the amount is sufficient she may be able to negotiate with all creditors and get all accounts closed
she cant just give it to you or other family member.
on your statement of affairs mum must list any policy that she has recently surrendered
Hi Richard, thanks for the reply...is there a set definition of 'recently' - just wondering if she could hold out long enough not to have to declare it! Some hope I'm sure :-) Thanks
My mum-in law is retired with debt
Posted - 30 March 2011 : 09:14:04
