Declaring bankruptcy will have a result upon your personal belongings, as you will no longer have control over your assets. In bankruptcy you are required to fore-fit all financial control and you must disclose your assets to the Official Receiver/Trustee who will then decide whether or not you can keep them.

Below are some of the frequently asked questions we get asked about bankruptcy assets. But take these as a guide only, as nothing beats getting professional advice from a bankruptcy expert. We have a dedicated bankruptcy team who can answer any questions that you may have about your assets in bankruptcy.

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Questions About Bankruptcy Assets

What Happens to my Assets when I Declare Bankruptcy?

After you declare yourself bankrupt, you will only be allowed to keep assets which are required to maintain a basic standard of living. Below gives you a sample list of these bankruptcy assets, but remember that these could also be sold if their individual value is worth more than the cost of a suitable replacement:

  • Items you need for your employment – such a tools of the trade or books. You will only be allowed to keep your car in bankruptcy if you need your car for business reasons or for travelling to and from work.
  • Basic items in the home – such as bedding, furniture and necessary electrical equipments such as your fridge or washing machine.

bankruptcy assets

The funds which are raised from the selling of the assets will be used to pay the fees, costs and expenses of the bankruptcy and your creditors.

There is also a risk to your future assets during your bankruptcy order. For example, if you inherit a windfall during your bankruptcy then this will have to be paid towards your creditors.

Will my Bankruptcy Affect my Partner’s Assets?

They will not be affected as long as your and your partner’s financial affairs are totally seperate. So assets which are in your partner’s name should not be taken into account through your own bankruptcy.

If you have joint debts, and you are made bankrupt, then the situation changes. Please seek expert bankruptcy advice about this matter, as your partner could become liable for the total debt.

My Home is Jointly Owned with my Partner – What will Happen to this Asset?

If both of your names are on the mortgage, then the equity will be split between the two of you. This does not mean that you will be able to keep your house in bankruptcy. It does, however, mean that your partner’s equity in the property cannot be touched by your creditors. But someone will still have to purchase your beneficial interest in the property or else the home can be sold.

Can I Sell my Assets Before Bankruptcy?

If you believe that being declared bankrupt is inevitable, you could sell assets which would otherwise be sold within bankruptcy, such as your car. You may be able to get a higher selling price, as it is likely that the Trustee/Official Receiver will sell your assets at a public auction with the intention of getting a reasonable price in the fastest time. Your bankruptcy could even be prevented if you raise enough funds to offer a full and final settlement to your creditors.

HOWEVER, you must not do what is called ‘Transactions at Under Value’. This is when you give away or sell your assets at less than their true value, as this is deemed unfair to your creditors.

The Official Receiver/Trustee will take a detailed look into your finances and assets once you have declared bankruptcy. They will look at transactions which were performed up to 5 years before the bankruptcy if you were insolvent at the time, or transactions performed up to 2 years before bankruptcy.

If you are found to have sold ‘Transactions at Under Value’, your Official Receiver/Trustee can go to court to have the transaction reversed. You could also have a Bankruptcy Restriction Order (BRO) placed against you, meaning that the restrictions of your bankruptcy could last for up to 15 years.