Items Excluded From BankruptcyIt is only reasonable that you be allowed to keep essential items and are not impeded from earning a living.
Items which can to be excluded from bankruptcy include:For information about property see – Bankruptcy & Your Home.
- Household items essential for basic domestic needs – clothes, furniture, TV etc.
- A modest vehicle depending on circumstances (see Bankruptcy & Your Car)
- A residential tenancy.
- Items needed for trade or employment, such as tools and computing equipment.
- Money held in pension funds (see Bankruptcy & Your Pension)
- Money obtained from a student loan, if a balance of the loan remains payable.
Disposing Of Your Assets Before BankruptcyIf Bankruptcy is looming and unavoidable, you may consider taking personal responsibility for the sale of any assets that would otherwise be sold by the Trustee, such as your car. The Trustee could put the items for sale at public action with the intention of getting a reasonable price in the quickest time. You may be able to raise more money by selling assets by other means. This may prevent the bankruptcy if you can raise enough money to repay what is owed or agree a settlement. You should take care to avoid selling or giving away your belongings as less than their true value. This is called making “transactions at an undervalue”. This is not allowed and may result in a Bankruptcy Restriction Order.
Unreasonable AssetsWhat assets could be sold? If the Trustee determines that an asset is worth more than “reasonable replacement value” it may be sold with an allowance given to buy a cheaper alternative. The balance of money raised (less funds required for a replacement) will form part of the bankruptcy estate.
Assets Obtained Or Received During BankruptcyAny assets or monies obtained from any source whilst you are bankrupt (i.e. before discharge) may be claimed as part of the Bankrupt’s estate by the Trustee.
It is an offence not to disclose information such as:
- Anything bequest in a will, for example a property.
- Something of little value at the time of the bankruptcy order, but rising in value before bankruptcy discharge.
- Claims made against another person through court proceedings.
- Any other windfall.