dbworker33
Junior Member
What is the name of your state (only U.S. law)? New Jersey
I can't seem to find a definitive answer while researching online.
My mother-in-law passed away without a will. The mortgage on her house is higher than what the house is now worth. The only thing she left when she passed was a life insurance policy that names my wife as the beneficiary.
Does the bank that holds the mortgage (creditor) have a claim against the proceeds that my wife will recieve from the life insurance payment? I know that life insurance is a non-probate asset, so she wouldn't have to go through probate court to receive this payment. We are thinking to not go to probate and just let the house go into foreclosure, let the bank sell the house and recover as much as they can on the mortgage. We are just afraid that they will then come after us (life insurance payment) to pay the difference.
Any advice would be greatly appreciated. Thank you
I can't seem to find a definitive answer while researching online.
My mother-in-law passed away without a will. The mortgage on her house is higher than what the house is now worth. The only thing she left when she passed was a life insurance policy that names my wife as the beneficiary.
Does the bank that holds the mortgage (creditor) have a claim against the proceeds that my wife will recieve from the life insurance payment? I know that life insurance is a non-probate asset, so she wouldn't have to go through probate court to receive this payment. We are thinking to not go to probate and just let the house go into foreclosure, let the bank sell the house and recover as much as they can on the mortgage. We are just afraid that they will then come after us (life insurance payment) to pay the difference.
Any advice would be greatly appreciated. Thank you