Allianz MasterDex 10 annuities

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Allianz MasterDex 10 annuities

by John McCoy
(Sebastopol, CA, USA)

Re: My Allianz MasterDex 10 annuities investment

I have recently filed Chapter 7 bankruptcy and have been trying to find out from CA attorneys whether or not the variable indexed annuities that I have had for 5 years might be exempt (or not exempt) from being liquidated during the 341 hearing to pay off credit card debts that are less than the annuities cash surrender value? Will the trustee in the bankruptcy hearing expect me to use surrender value funds from my annuities account to pay off the credit card debt, or some portion of it over time? If this is required, I will have to take the loss for filing fees and paralegal assistance and not finalize the bankruptcy. This was a retirement investment, not paid from employment; nor is it a IRA, or the typical retirement fund. It is critically important that I get this question answered ASAP.

Thank you,

John McCoy

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Allianz MasterDex 10 annuities

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Re: Exemption on annuities in bankruptcy case
by: John McCoy

Thanks for trying to answer. I had called the CA State Insurance Commissioner's office and the guy who answered didn't know what I was talking about, and just told me to consult an attorney. I tried to call 3 bankruptcy attorneys in Santa Rosa, CA with no response. The one attorney that I had a consultation with back in April of 2009, I thought would be willing to help since he's worked with two close friends of mine as clients. But still he didn't bother to call back and his assistants both told me that I had to be his client or pay $275/hr to meet with him. He could have answered this question in less than 5 minutes. Yes, I would have to pay a surrender fee for an early withdrawal of funds unless I wait until after May 29th of 2011. At that time, I can request only 10% of the original cash value since I was 59 and a half years old last year. It is also taxable income. I was going to tell the trustee in the 341 hearing that this non-qualifying (or qualifying) annuity is my retirement funds only, but it's actually an investment which is usually considered non-exempt from bankruptcy. I also plan to tell the trustee that I was robbed in a ponzi scheme in 2009 for a huge $40K+ loss.

Perhaps, there's someone who has read this or who will read this that knows the extent to which a non-qualifying annuity is exempt or not and would be willing to share this information if they've gone through a Chapter 7 bankruptcy successfully.

Cordially,
John McCoy
(707) 217-7422

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CA Creditor Protection
by: Anonymous

Hi John,
Thanks for this question. As a disclosure I am not an attorney or CPA in California. With that said, each state has some form of creditor protection laws when it comes to life insurance and annuity cash values. The laws also differ when it comes to protection on either qualified or non-qualified annuities. I am not 100% sure of what California covers but you may be covered up to $100,000 or more. If they do make you liquidate, you may be responsible for early surrender charges and an IRS 10% penalty if you are under the age of 59 ½.

I would suggest calling or emailing the CA department of insurance. Tell them you have a non-qualified annuity and ask them what the limits are for creditor protection in Ca. This way, you will go into the meeting with your facts straight from the horse’s mouth.

Thank you,

Robert

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