Becoming bankrupt
Your possessions
The person dealing with your bankruptcy (the ‘trustee’) will decide if the things you own could be sold to pay your bankruptcy debts. If the trustee decides to sell the things you own, you must hand them over.
You can usually keep:
- things you need for your job, like tools or a vehicle
- essential household items, like clothing, bedding and furniture
You might have to give up these items, including vehicles, if they’re worth more than a reasonable replacement. Your trustee will either use the money from the sale to pay for a cheaper item or give you the money to buy one. Any money left will be used to pay for your bankruptcy and make payments towards your debts.
Vehicles
If you own a vehicle and other transport is not practical, you can usually keep it to:
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meet your household’s basic needs
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care for someone else, for example a disabled relative
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do your job
If you got your vehicle through a finance agreement
The rules are different if you got your vehicle through:
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hire purchase
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conditional sale
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a leasing agreement
If your vehicle is worth more than the amount left to pay on it, the trustee might sell it to pay for your bankruptcy and make payments towards your debts. They cannot replace your vehicle with a cheaper alternative.
If they do not sell it, they’ll let you and the finance company know. The finance company could:
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take back the vehicle
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let you or another person take over the finance agreement