life insurance and outstanding debt

[funderburke]

i am my mothers poa. she lives in north carolina. due to perm. disability she has excessive outstanding debt. she has little life ins due to disability.
if i let the debt go and she passes, do the creditors have a right to the life insurance.
or do i have to file bankruptcy for her.
thanks

 

[ALawyer]

It may be possible to work out something with the creditors without filing bankruptcy -- but if you are going to do a bankruptcy, now is the time as the new bankruptcy bill will make things more difficult and expense.