We're very sorry to hear about your circumstances and the loss of your husband.
Unfortunately to compound things, you are in receipt of what's called "after-acquired property" while you are still in bankruptcy. After-acquired property vests with the Trustee, and you must disclose it to him/her. The Trustee and your creditors are unfortunately entitled to the funds first.
Depending on the amount of insurance you received, and the amount of your debt load, you may be able to look at filing a proposal to your creditors. This would have been one of the options that the Trustee reviewed with you at the start....whereby you put together a plan to pay your creditors a settlement or "proposal" of some type. A person who is still in bankruptcy can file this "proposal" if their circumstances have since changed. If successful, the benefit to you is that your bankruptcy is annulled.
If the life insurance is more than enough to pay off what is owed in the bankruptcy, you'll need to weigh the pros and cons of annulling your bankruptcy versus possibly having some surplus life insurance money paid back to you to live on.
If you would like more information about this option, don't hesitate to contact one of us or your Trustee. Otherwise, you do need to disclose this property to your Trustee. Again, our condolences on your loss.
CIRP, LIT, CPA
Senior Vice President
Servicing: Calgary (Downtown), Red Deer, Drumheller, Calgary (NE), Airdrie
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