Which California CCP 704 Section Protects Whole Life Insurance in Chapter 7?

Question from JT, Which California CCP 704 Section Protects Whole Life Insurance in Chapter 7?

Answer from AI:

In a Chapter 7 bankruptcy in California, the protection of funds in a whole life insurance policy is primarily governed by California Code of Civil Procedure (CCP) § 704.100. This section provides an exemption for the cash surrender value of certain life insurance policies, including whole life policies, up to a specific limit.

Key Points About CCP § 704.100:

• Protection for Cash Value: CCP § 704.100 protects the cash surrender value of a whole life insurance policy. This is the amount you could receive if you surrender or cancel the policy.
• Exemption Limit: The exemption applies to the lesser of the following:
  • The cash surrender value of the policy.
  • $13,800.
• Multiple Policies: The exemption applies per policy, but if you have multiple policies, the total exemption may be higher.

Related Protections:

• Proceeds for Beneficiaries: CCP § 704.160 protects life insurance proceeds if they are held for the benefit of a spouse, child, or other dependent. This means that if the proceeds are intended for a beneficiary, they may be shielded from creditors.

Important Considerations:

• Exceptions: There are exceptions to these protections. For example, life insurance proceeds may not be exempt if they are intended to satisfy obligations like child support or alimony.
• Consult a Legal Professional: Bankruptcy and exemption laws can be complex. Consulting a bankruptcy attorney is advisable to ensure you understand how these protections apply to your specific situation.

Conclusion:

While CCP § 704.100 provides significant protection for whole life insurance policies, the specifics can vary based on individual circumstances. Seeking professional legal advice is crucial for navigating the complexities of bankruptcy and exemptions.