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 Posted: Tue Feb 24, 2009 6:49 pm Post subject: Can life insurance policies be garnished by creditors in FL? |
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My mom has a judgment against her in Florida and the law firm is asking for information about her policy. Will she have to forfeit her policy amount ($7,000) to creditors upon her death?
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anitaanded1
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| Posted: Wed Feb 25, 2009 6:10 am Post subject: |
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IMO the creditors can't garnish the life insurance benefits if it has a named beneficiary. After the death of the policy holder the policy benefits will go to the beneficiary and therefore can't be garnished for paying the debts of the deceased. But if the policy holder remains the owner of the plan at the time of her death, the policy would then get included in her estate and will be used towards paying the unsettled debts.
However, the laws might vary between the states.
Regards,
Juanita
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Juanita
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| Posted: Wed Feb 25, 2009 6:23 am Post subject: |
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You may look -up the state provided list of exempted assets to know whether or not the creditors can claim the policy benefits. Following is the list of the exempted assets under the Florida bankruptcy law.
As far I know any cash value and the death benefits of a life policy is an exempted asset according to the FL bankruptcy law. Not only that in FL you can also protect the equity that you have accumulated in an asset from the creditors.
You may need to ask the law firm why they need the information regarding policies.
Hope this helps.
~Jeremy |
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JeremyHolter
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| Posted: Wed Feb 25, 2009 10:58 am Post subject: |
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| Quote: | | My mom has a judgment against her in Florida and the law firm is asking for information about her policy. Will she have to forfeit her policy amount ($7,000) to creditors upon her death? |
Allow me to restate your question:
Question: Will the beneficiary of my Mom's life insurance policy in FLORIDA have to forfeit the death benefit paid to the beneficiary because my Mom had a judgment against her when she died?
Answer: No.
Florida Statute 222.13
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222.13 Life insurance policies; disposition of proceeds.
(1) Whenever any person residing in the state shall die leaving insurance on his or her life, the said insurance shall inure exclusively to the benefit of the person for whose use and benefit such insurance is designated in the policy, and the proceeds thereof shall be exempt from the claims of creditors of the insured unless the insurance policy or a valid assignment thereof provides otherwise.
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GarySpicuzza
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| Posted: Wed Feb 25, 2009 5:56 pm Post subject: |
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| I am wondering if maybe the collection agency is using a scare tatic to get your mother to repay the 7,000 dollars. They are known to do this and it is actually illegal. I am with Gary, ask them why they need this information and you may want to quote the above Statute. |
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fireyone
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| Posted: Sat Aug 29, 2009 9:50 pm Post subject: social security |
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can ss security be garnished
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nnn
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| Posted: Sun Aug 30, 2009 12:14 am Post subject: |
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| The answer to the original question is "no" unless the beneficiary is the insured or the insured's estate. |
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InsuranceExpert
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