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Bankruptcy Attorney serving Akron, Canton, Massilin, Dover, New Philidalphia, and throughout Tuscarawas, Summit, and Stark County. 330-409-2876

Sheppard Law Offices


Canton, Ohio Bankruptcy Attorney Kenneth L. Sheppard, Jr.

 Bankruptcy attorney serving central Ohio and the Akron-Canton area and throughout Tuscarawas, Summit and Stark County , Sheppard Law Offices Co., L.P.A. BBB Business Review

FREE Debt Relief & Bankruptcy Consultation

(330) 409-2876  or  (877) 505-9455


FREE Debt Relief Consultation Call (330) 409-2876 or (877) 505-9455

Sheppard Law Offices

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Keep Life Insurance & Cash Value in Bankruptcy



Protecting the Cash Value and Benefits of Life Insurance


If you are concerned about losing your life insurance and its cash value if you file bankruptcy, there is good news. First of all, paying for life insurance may help you to qualify to file chapter 7 bankruptcy. The premium paid for Term-Life insurance applies directly to reduce current monthly income under the chapter 7 bankruptcy means test, therefore increasing the likelihood for you to qualify to file chapter 7 bankruptcy. Second, if you have a Whole Life Insurance policy you may keep the policy if certain conditions are met.


Keeping Term Life Insurance When Filing Bankruptcy

If you have a Term Life insurance policy, since this type of life insurance does not grow any cash surrender value, there is no reason for the Ohio bankruptcy trustee to seek to take it. Therefore, when filing bankruptcy in Ohio, your term life insurance policy may remain in force if you are still paying on it. It is important to note that if you are considering filing for chapter 7 bankruptcy in Ohio, it is a good idea to keep that term life insurance policy in force due to its favorable treatment under the means test.


Keeping Whole Life Insurance When Filing Bankruptcy

There are two major areas of concern in dealing with Whole Life insurance and other cash value type life insurance policies. The first consideration is the cash surrender value of the policy, and if it will be taken by the bankruptcy trustee to pay your creditors. The second area of concern most people have is with keeping the policy in force for the death benefit (the amount that your beneficiary will receive in the event of your death).


The good news is that if your beneficiary is a dependent (your spouse or children), then the cash value of the policy will be exempt. This also means that you can keep the policy in force for the protection of your family in the event of your death.


If your beneficiary is not a dependent, the trustee is able to cash the policy for its cash surrender value and apply it to your bankruptcy estate. This non-exempt status also applies to a policy that builds a cash value that you have on the life of a child. However, bankruptcy exemptions may be applied to cash value policies. In a case where you or your child may not qualify to get a new policy or there is another reason that you should not give up the policy, your Canton Ohio bankruptcy attorney at Sheppard Law can discuss alternatives with you which may allow you to keep the life insurance policy in force. An example of this is taking a policy loan to provide the  cash value from the policy to the bankruptcy estate.


Are you are considering filing bankruptcy and want to know if you can keep your life insurance? Contact Canton, Ohio bankruptcy attorney Kenneth Sheppard, Jr. at (330) 409-2876  for a free consultation. For your convenience we have bankruptcy law offices in Canton, Columbus, Newark, and Mt. Vernon, Ohio. Your Canton, Ohio Bankruptcy Attorney will meet with you and discuss the needs of your particular case so you can recover from the stress of overwhelming debt. We provide affordable bankruptcy filing assistance for our clients.


Tax Relief, Debt Relief, and Bankruptcy Filing office in Canton, Ohio

Sheppard Law Offices

Canton, Ohio Office

Belden Village Tower, 200

Canton, Ohio 44718

Tel: (330) 409-2876

Columbus Ohio Office

2600 Tiller Lane, Suite A

Columbus, Ohio 43231

Tel: (614) 523-3106

Newark, Ohio Office

843 N. 21st Street, Suite 108

Newark, Ohio 43055

Tel: (740) 345-7138

Mt. Vernon, Ohio Office

11 West Gambier Street

Mt. Vernon, Ohio 43050

Tel: (740) 392-0404

We are a debt relief agency. We help people file for protection under the U.S. Bankruptcy Code.

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Sheppard Law Offices, LPA is conveniently located and serving chapter 7 and chapter 13 bankruptcy clients in Canton, Ohio. Our office is a short drive from throughout Stark, Tuscarawas, and Summit Counties. We regularly provide debt relief solutions to clients from Akron, Canton, North Canton, Massillon, Dover, New Philadelphia, Alliance, Navarre, Strasburg, Ballivor, Jackson Township, Canal Fulton, Barberton, Greenlawn, Medina, Wooster, Orrville, Dalton, Minerva, Ashland, Wadsworth, Carrollton, Dundee, Millersburg, Hartville, Doylestown, Green, Uniontown, Salem, Columbiana, Uniontown, and throughout Ohio.