Property a bankrupt can keep
The property that the trustee cannot take from a bankrupt is set out in the Act [Bankruptcy Act 1966 (Cth) s 116(2), Bankruptcy Regulations 2021 (Cth) regs 27-30]. This property includes:
- ordinary clothing
- necessary household goods (such as lounge suite, kitchen furniture, ordinary domestic refrigerator, washing machine, educational material, television set, stereo, video recorder, personal computer and phone)
- tools of trade, plant and equipment that are used to earn income, and that are up to $4,200 (as at 1 July 2023, indexed annually)
- certain policies of life assurance, endowment assurance, policies of insurance
- the bankrupt's interest in certain superannuation funds or approved
- money received as damages or compensation for personal injury to the bankrupt, his or her spouse or family (including death). Also any property (such as a house or car) bought with, or mostly with, that money. Where those assets have been purchased partly but not substantially with compensation for injuries, for example 10 per cent, on the sale of that asset the bankrupt is entitled to receive that same percentage from the proceeds of the sale
- amounts paid by the State to the bankrupt under certain rural assistance agreements between the Commonwealth and the States
- the separate property of a non-bankrupt spouse or held on trust for another person
- motor vehicles with a net equity of less than $9,100 may not be taken by the trustee (as at 1 July 2023, indexed annually) - where a vehicle of higher value is sold the bankrupt will be given $9,100 in order to buy a cheaper vehicle which they can keep, see Motor vehicles.
In determining what household goods can be retained, the trustee must regard:
- the number and age of members of the bankrupt's household
- any special health or medical needs
- any special climatic, geographical isolation factors
- whether the assets are reasonably necessary for the household to run properly
- whether the cost of storage and sale would exceed the sale price
The amounts stated above are indexed and can be checked on the AFSA website.
Property a bankrupt can keep : Last Revised: Thu Jan 4th 2024
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