Can creditors take my life insurance after my husband died?


Q. My husband died with no assets except a 24-year-old high mileage car. I just got a life insurance beneficiary check for $10,000. If I deposit the check into my bank account, can the New Jersey courts take the funds for an outstanding judgement against me? I was hospitalized in October 2018 and with my husband so ill, I could not pay one of the hospital bills not covered by insurance. This life insurance money is all that I have to live on. How can I protect it?
— Widow

A. We’re sorry to hear about your husband.

These are tough times for so many people and we understand why you want to protect the funds.

Contact the original creditor who has the judgment against you, said Karra Kingston, a bankruptcy attorney in Union City.

“Ask them if they would provide a letter of satisfaction or how you can work with them directly,” she said.

If the creditor won’t drop the debt, a payment plan that you can afford would be the next goal.

“If they have closed or you cannot find their information, then you may need to go to court and try to reopen the case to remove the judgment,” Kingston said.

This can be time consuming — all the more during the coronavirus pandemic, when courts are only addressing emergent matters.

Email your questions to .

This story was originally published on April 17, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.