I have a life insurance loan from Prudential. Is this considered a secured loan since it based on the cash value of the insurance policy? Would it also be considered an asset at all since there is a cash value of approx $150 left on it?
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If you pledged your cash-value policy as collateral, then it is a secured debt. Since it's a cash-value policy, it is in fact an asset. However, it is encumbered by the secured loan. The Trustee couldn't touch it anyhow since it is pledged as security to the loan. If there is some value because the amount of the loan is less than the present cash-value of the policy, then you would need to exempt that amount.Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
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Do not want to hijack a thread..but also in regards to life insurance loans...I also have a similar policy, also Prudential. I owe about 2,500 on it (old loan) and have another 3,500 available to me as cash still. Could I pay back the old loan on it without it being 'preferential' or anything like that? I may sell my car, and was wondering if I could use some of that cash (basically non-exempt) to pay back the old life insurance loan. Thanks...Comment
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