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Cash Value Increase in Life Insurance Policy Not Reduced by Debtor’s Pre-Petition Cash Withdrawals

Case: Cohen v. Prudential Insurance Company, et al. (In re Moosman), Adv. Pro. No. 11-1482 ABC (Bankr.D.Colo. 2012).

Discussion: Exemptions allow debtors to protect certain property from creditors or a bankruptcy trustee. Section 522 of the Bankruptcy Code sets forth the federal exemptions for debtors in bankruptcy. These exemptions are available to debtors unless the law of the state that is applicable in the debtor’s bankruptcy case specifically provides that the federal exemptions do not apply. In 1981, the Colorado state legislature opted out of the federal exemptions set forth in 11 U.S.C. § 522.
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