When deciding whether to go bankrupt it is important to know whether there will be any affect on your partner’s assets. If bankruptcy will affect your partner’s assets, there may also be steps you can take to minimise the impact of this.
The general rule is that any assets which your partner owns are not able to be sold by your bankruptcy Trustee. However, there are some exceptions.
Assets that you financially contributed to
If you have financially contributed to an asset owned by your partner, it is possible your bankruptcy Trustee may have a claim to the asset. This includes (for example):
- If you have paid a deposit for a house;
- You have made mortgage repayments on a home loan;
- You have transferred an asset to your partner’s name; or
- You have paid the purchase price for a car but it has been registered in your partner’s name.
The above examples are by no means exhaustive and these are the types of issues you should obtain advice about before going bankrupt.
You jointly own an asset with your partner
A joint asset is an asset owned by more than one person, for example a jointly owned house or funds held in a joint bank account.
Your bankruptcy Trustee will have an interest in your share of the asset. So, for example:
- If you own a house with your partner, your bankruptcy Trustee can sell your share of the house, but not your partners (subject to any claims to your partner’s interest for example by virtue of financial contributions made).
- If you have a joint bank account with your partner your bankruptcy Trustee will have a claim to your interest in the funds held (most likely half of the funds).
There are a number of matters to consider with jointly owned assets and this is another type of issue you should obtain advice about before going bankrupt.
Information and advice regarding bankruptcy
If you would like to obtain further general information regarding bankruptcy you may wish to view our Bankruptcy FAQs Page. You may use our Income Contribution Calculator to estimate the income contributions you are liable for.