I was made bankrupt last week and it has been a very distressing time for my family and I. I have heard that the trustee is going to sell all of my assets. I am very stressed about this and I just don't know how my family will cope. Is this true?
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Answer by Kelly Angus, Adelaide 5000 SA
- When you are made bankrupt a trustee is appointed to administer your bankruptcy and this may include selling certain assets for your creditors’ benefit.
- Assets are anything of value you own at the time you became bankrupt and anything you buy, receive or become entitled to during your bankruptcy.
- You are permitted to keep certain assets including:
- most ordinary household items;
- tools up to a certain value that are used to earn an income;
- vehicles where the total value of the vehicles minus the sum owing under finance is no more than a certain amount;
- most balances in regulated superannuation funds and payments from regulated superannuation funds received on or after your date of bankruptcy;
- life insurance policies for you or your spouse and the proceeds from these policies received after your bankruptcy;
- compensation for a personal injury and assets bought with such compensation;
- assets held by you in trust for another person such as your son or daughter’s bank account; and
- awards such medals or trophies with sentimental value if your creditors agree.
- Apart from the assets you are permitted to keep your trustee may recover any asset including:
- your house and any other property including leases;
- vehicles other than exempt ones;
- shares and other investments including shares held in your employer’s business;
- tax refunds for income earned before you became bankrupt;
- proceeds of a deceased estate; and
- lottery winnings and other competition prizes.