life assurance while bankrupt

paul10mm

hi all
just got a letter from the OR about our life assurance at the time we went bankrupt we had a level term life assurance for £150,000 when we had our interview i asked what should we do about it? and we were told we could either keep paying it or cancel it!because it was £36 a month we cancelled it now today we get a letter saying its an asset in our bankruptcy! this is the quote from the letter!!
"as you should have been made aware,the options open to you in connection with this policy are that you either cease payment(whereby the policy will lapse)and effect a new policy or you may make an offer equivalent to 12 months premiums to the Offical Reciver in order that he may then take steps to assign the policy back to you"
We dont have £431.64!!i cant talk to them until tuesday so of course we are going nuts do we have to now pay for life assurance so the OR can keep it for 3 years??? We will have to take out a new policy that will cost us even more!! Very unfair If they had told us at the interview we had to keep it we would have!!!!!!!

Addicted2Chocolate

your life policy is an asset in the bankruptcy because it has a surrender value.
he letter means if you wish to retain the benefit of this existing policy you have to pay the 12 months premiums to the OR.
If you do not go down this route you do not make any further payments under the existing policy, the OR surrenders it and claims the current surrender value. You can take out a new policy if you wish.
Does that make sense? The OR cannot make you keep the curent policy, you have misunderstood the letter i think.

paul10mm

hi ya
thanks for comment what we dont understand is there is no surrender value on this policy we have already checked with the company!!!!!so why would we want to pay 400 quid???and how can it be an asset if its now void as we have not paid it since our meeting with our original OR??They have also changed our OR as she had had a lot of cpmplaints!!!

Addicted2Chocolate

do you mean they have changed your examiner (ie the [erson responsible for interviews, dealing with assets etc?) from what you posted before about the IPA problems that would be the examiner....
If the life policy had no surrender value then it has no realisable value so cant be an asset in the bankruptcy. this makes no sense!
but the OR always realises life policies which may have lapsed, i dont think the payments having stopped prevents them from doing so. maybe the OR as Trustee has special status not sure.
hope you get ths sorted!

Emmzi

As this is term assurance, there is no surrender value. So unless it's one of those 'pay 12 instalments and get halff back after the first year' efforts, feel free to ignore it.

Looks like OR has just typed wrong letter.

paul10mm

have spoken to the OR this morning and yes they confirm they have changed my examiner is that strange??Ref the life assurance yes they thought it had a surrender value and of course it didnt and they did confirm that i did ask at our interview what to do about policey im now free to get new life assurance and they will have no intrest in it!!!???
I took the time to ask about breakdown cover for the cars as well and this is also allowed!! yet we are not allowed to have sky basic package as there is no freeview were we live and normal tv picturs is utter rubbish Still they make the rules i just have to live with them!!!

Emmzi

Glad you got it sorted Paul!

Think you might have to sign up for dvds at local library..!