If you’re struggling with serious debt, bankruptcy can be a real solution to your problems. What you may not know though, is that there are also serious consequences to this solution. These serious consequences include your trustee being able to claim and sell some of your most-prized possessions. So, what exactly could you lose if you were to claim for bankruptcy? Let’s find out.
Assets you could lose
- Real estate
When you become bankrupt, your trustee becomes the owner of your share of any house or property that you own or have an interest in. This means your trustee now has control over the property and can sell it to help pay your debts.
Property may include your:
- Farm or business premises.
- Your vehicle
Vehicles in which you have more than $7,700 equity will likely be seized. You can find out more about what would happen to your vehicle here.
- Tools of trade
These are tools you use to make a living, such as a laptop, tradesmen tools and more. Tools valued at more than $3,750 are not protected and can be seized.
- Antiques & Luxury Items
If you have any antiques, pieces of art, or luxury items such as jewellery or electronic items of a significant value, you would likely lose these.
- Cash in bank
Have more than $1,000 in your bank account? You would probably lose that.
- Other funds
If you have recently received an inheritance, a tax refund or any other winnings, it’s likely you will lose them.
Assets that are safe
When it comes to your assets and bankruptcy, you will be relieved to know that not everything is up for grabs. There are assets that will remain safe, as follows:
- Ordinary household items
Bankruptcy allows you to keep most ordinary household items of reasonable value, such as your:
- TV & Computer
- Superannuation & Insurance
Any superannuation or life insurance policies cannot be touched.
It’s not only your assets that are affected
What you may not realise, is that bankruptcy doesn’t just impact what you own. That’s right, your partner’s assets can also be affected.
If they jointly own any asset with you, have possession of any asset you own, or own assets that you helped buy or contributed toward (even if the assets aren’t in your name), then these assets could also be up for grabs.
This means a home or car that is solely in your partner’s name, but you helped buy, could be at risk if you file for bankruptcy.
Whilst bankruptcy can provide some much-needed relief from debt, there are also serious consequences which are serious for you to consider.
At Life After Debt®, with offices in Perth and Sydney; we can’t change the assets you could lose, but what we can do is help you reduce your unsecured debt and avoid bankruptcy by offering affordable, practical financial solutions, proven to relieve hardship. We provide honest and sympathetic, without judgement, advice. Contact us to see how we can help you today.