Are you confused on what assets a bankruptcy can keep? The assets you can keep are otherwise referred to non-divisible assets. These bankruptcy assets are protected from the Trustee and most commonly include the following.
• Household items - this includes all necessary household items such as furniture, bedding, laundry equipment, sporting equipment, clothing and educational tools. It is important to place emphasis on the word necessary, a bankrupt with multiple televisions or expensive antique furniture will not be protected from the trustee to recover.
• Personal items - these items may include photographs, wedding ring or any other items of sentimental value. However as a bankrupt you need to be aware that these items needs to be disclosed to your trustee and on some occasions certain items need the approval of your creditors before they can be retain as a non-divisible bankruptcy asset.
• Motor vehicles - these are vehicles with an equity value of $6,850 or lower. The vehicles need to be for primarily transport purposes. The equity values of the vehicles are regularly updated by the Insolvency Trustee Services Australia.
• Tools of trade - as a bankrupt you are able to keep tools up to a value of $3,400 that will help you earn an income. The values of tools of trade a bankrupt can keep are regularly updated by the Insolvency Trustee Services Australia.
• Superannuation - Generally speaking the funds held in a bankrupt's superannuation account is protected from the trustee. However if funds were deposited into your superannuation account out of the ordinary course of business prior to the date of bankruptcy then that amount deposited will be available for the trustee of your bankrupt estate to realise.
• Life insurance policies for yourself or your spouse - if you or your spouse receives a life insurance policy payout subsequent to the date of your bankruptcy, that payout will be protected from the recovery of the trustee.
• Compensation of personal injury - the funds received by you for the compensation of personal injury are exempt from the trustee to recover. Further to this, the assets that you buy with this money are also exempt from the trustee to recover.
• An asset held by you for another person - if you held assets in trust for another person e.g. your child's education fund or your child's bank account, the funds are exempt from the trustee to recover.
We hope this article has given you a clearer understanding on which assets fall within this category of non-divisible bankruptcy assets.
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