Blog Post

Topics

Casenotes: 2007 WDNY Bankruptcy cases
Casenotes: 2008 WDNY Bankruptcy cases
Casenotes: 2009 WDNY Bankruptcy cases
Casenotes: 2010 WDNY Bankruptcy cases
Legislation and Rules Updates
News from the Western District of New York Bankruptcy Court
Notes from BAPCPA
Notes on Bankruptcy Cases outside WDNY
Statistical trends in WDNY bankruptcies
Supreme Court bankruptcy cases

Recent Updates

July 27, 2010
A (Brief) history of New York exemptions, Part I

July 06, 2010
Bankruptcy exemption expansion passes New York legislature, awaits Governor's signature

June 29, 2010
Bankruptcy Exemption may expand in NY - an historical perspective

June 21, 2010
Retroactive application of Increased homestead exemption; Part II: Calloway and Nguyen

June 21, 2010
Bad Faith Chapter 13 plan: case filed 10 days after property transferred: Johnson

Archives

January, 2010
November, 2009

Web Resources

FindLaw
Thomson West
U.S. Courts
Westlaw
United States Chamber of Commerce
FirstGov
Library of Congress
White House
Internal Revenue Service
Yahoo!Legal Blog Directory

Exempting life insurance after Wornick decision: MacDonald

Posted by: Peter Scribner
November 17, 2009
Topic: Recent Cases in the bankruptcy Court Western District of New York

In re MacDonald #08-11741 (Decision March 10, 2009; Judge Bucki, Buffalo)  Motion by debtors to compel trustee to return life insurance proceeds turned over pursuant to the 2002 decision in Teufel etc. Prior to 2008, Western District of New York courts held that when a husband and a wife both file bankruptcy and one spouse has a life insurance policy with cash value and the other spouse as the beneficiary, the bankruptcy trustee, as trustee for both the owner and beneficiary of the policy, could claim in the cash value.  The Second Circuit overruled this line of cases Wornick v. Gaffney 554 F3d 486, decision 9/24/08, and ruled that the cash value of reciprocal life insurance policies in joint cases are exempt.  The MacDonald debtors then amended their exemptions to add the life insurance and then moved to have the trustee return funds previously turned over.  Judge Bucki granted that motion, noting that the exemption issue had not previously been litigated in this particular case, so no "law of the case" had been established to preclude the debtors from exempting the asset now.