Some property which a bankrupt obtains after bankruptcy is able to be collected and sold by their bankruptcy Trustee. This type of property is known as after acquired property. So what assets are (and are not) after acquired property and able to be sold by a bankruptcy Trustee.
Inheritances are the most common type of after acquired property we come across. And if you become entitled to an inheritance while you are bankrupt then the inheritance must be paid to your bankruptcy Trustee.
Lottery (and similar) winnings
This is another type of after acquired property (assuming the winnings are of a material amount) and any such gain must be paid to your bankruptcy Trustee. This is not an issue we come across all that often but it is a risk.
Assets bought by a bankrupt
If a bankrupt through his or her savings acquires an asset then that asset is after acquired property and is able to be collected and sold by their bankruptcy Trustee. Some common examples of this are:
- Cryptocurrency investments including any gains made through investing;
- A motor vehicle over the threshold; and
- Shares in public companies (i.e. on the share market).
If you daw superannuation from your super fund after bankruptcy by way of a lump sum it is NOT divisible property and therefore cannot be taken by your Trustee. However, if you take superannuation before bankruptcy then it just becomes cash and is property your bankruptcy Trustee can take.
Generally, if a bankrupt becomes entitled to life insurance either their own (if it is paid pre-death) or their partners then it will likely NOT be divisible property. This means a bankrupt can retain the life insurance funds.
Contact us for assistance
If you cannot pay your debts and would like to better understand the potential consequences and the options available, please contact Pearce & Heers at our Brisbane or Gold Coast offices for an for an initial, obligation-free consultation.