Assets and Bankruptcy
Bankruptcy will mean that you will surrender all possessions of value, including any equity in your home. The Trustee takes control of all assets that are not exempt from bankruptcy.
The Trustee will then arrange for their sale, the capital raised is then used to pay the cost associated with the bankruptcy, before paying the creditors.
The trustee will usually seize assets if the sale of the items is expected to raise at least £500 towards the bankruptcy.
Items Excluded from Bankruptcy
Items that are often excluded from bankruptcy:
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A residential tenancy
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Money held in a pension fund(s)
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A modest vehicle depending on your circumstances
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Items needed for trade or employment such as tools and computing equipment
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Household items essential for basic domestic needs. e.g. Clothes, Furniture, TV etc
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Money obtained from a student loan, if the balance of the student loan remains payable
Disposing of your Assets before Bankruptcy
If Bankruptcy is unavoidable you would be wise to take personal responsibility for the sale of any assets that would otherwise be sold by the Trustee.
The Trustee would put the items for sale at a public action with the intention of getting a reasonable price in the quickest time frame, in essence they are practically given away.
If you can raise more money be selling the items by other means, you should do so. This may even prevent the bankruptcy if you can raise enough cash to offer a full and final settlement.
What you must not do is give way or sell your belongings as less than their true value. This is called making Transactions At Under Value. This is not allowed and may result in a Bankruptcy Restriction Order.
Unreasonable Assets
What is a unreasonable asset?
Generally speaking; an unreasonable asset is a high value item that can be replaced with a cheaper item delivering a substantial saving, an unreasonable asset and may be claimed by the Trustee.
Sadly something valuable but nonessential to basic domestic living, especially if it requires money to maintain, like a Horse, will also be considered to be an unreasonable asset.
Assets obtained or received during bankruptcy
Any assets or capital obtained whilst serving bankruptcy (i.e., before discharge) may be claimed as part of the bankrupt's estate by the Trustee. It's an offense not to disclose such information. This includes:
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Any other windfall
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Anything bequest in a will, for example a property
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Claims made against another person through court proceedings
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Something of little value at the time of the bankruptcy order, but rising in value before bankruptcy discharge
Bankruptcy and Wills
If you know that you are to be the benefactor of a will; you may would be very well advised to get that will changed to the name of an non-serving bankruptcy until you are discharged from bankruptcy.