What Assets Can Be Taken in Bankruptcy ?
When you have been declared bankrupt the Trustee in charge of the process should be informed of all the assets that you possess and it will then be up to them to decide what you may keep.
The Trustee will then have control over any assets that are not exempt from the bankruptcy and will arrange for them to be sold. Any proceeds made from these sales will be put towards the bankruptcy. You will also find that once the bankruptcy order has been made, your bank and savings accounts will also be seized by the Trustee and any credit also used for the bankruptcy.
Signing over your Assets
Once declared bankrupt, the Court is able to check to see if you have given away or sold any assets for less then their worth over the last five years. If they find that you have done this then the assets will be seized.
Dealing with your Assets prior to Bankruptcy
If you know you will be declared bankrupt then you should sell any assets yourself. Should you be able to make enough from this then you may in some cases be able to prevent the bankruptcy. It is important to remember that you should not give away or sell these at less than their true value.
Only your own goods can be sold and if you can prove another person owns items then these cannot be sold. Should you own any expensive items jointly then it is still possible that you could be made to sell these, with the Court only retaining the amount that is yours.
In most case you will be able to keep personal and household items such as furniture, electrical goods and kitchen appliances. However should your items be overly expensive then you may be asked to sell them and replace them with a cheaper model. Items like this are known as unreasonable.
If you own a property then any equity in this can be taken and used by the Court. Should the property be a family home then it may be possible to wait until accommodation has been found. Should the mortgage be in joint names then this asset can still be seized but only the amount that would be yours will be kept by the Court. If there is no equity then the Official Receiver can still take possession of the house for up to 3 years.
Should you have a vehicle that you need for your job then you will often be able to keep this providing it is not classed as unreasonable. However if you have any other vehicles that you do not require for working then you will normally be told to sell these.
Should you come into a windfall payment during your Bankruptcy then this money will be taken by the Court. However, once you have been discharged you will be allowed to keep any windfalls.
You will normally find that this would not be classed as an asset and would not be used by the Court.