Can I Own Anything When Bankrupt?

What Assets Can You Keep In Bankruptcy?

Ok, you know now that once you have filed for bankruptcy, all debts caught by your bankruptcy are owed by the bankrupt estate, not you. They are in the bucket, you are debt free. What Will I Still Own? I have previously mentioned that the bankrupt estate (bucket) may also collect some of your assets and income whilst you are bankrupt so now let’s look at what assets you can keep and how your life will work once you are bankrupt.

You need to be across what assets you can keep in bankruptcy and income you can keep to be able to work out how you will take your life forward.

Do I Lose My House If I Go Bankrupt?

Not being sure what happens to my house if I go bankrupt, I was surprised when I learned that it was possible for me to remain living in my home – I had options. I was not forced to ‘pack up and move out’, but had the option to source a family member or friend to buy the house from the Bankruptcy Trustee at valuation. With the help of a family member or friend, I would be able to keep living in my home. Further, if I had little equity in my home the co-owner could save the home by just paying my share of the equity to the bankrupt estate.

I explored the option of saving my home with members of my family but they were concerned they would become entangled with my financial problems. After meeting with their solicitor they were assured that by buying the house from the Bankruptcy Trustee they would receive good title to the house and be safe.

For me, once I had fully digested bankruptcy and options about how my life would work going forward, I decided to move to a different location and not worry about keeping my house. What I would say is that exploring keeping the house was part of my recovery and working out how I wanted my life to work.

When exploring keeping my home I also learned that my ownership in my home may be varied if other persons contributed to my purchase of the property. Also, if my property is jointly owned and I had increased the mortgage at any time and used the money to pay for other things, that could cause my ownership to be varied.

It can all get a bit complicated, but if you wish to explore what can be done to help and give you the option to remain living in your home, give Understanding Bankruptcy a call on 1300 794 492 or email Not knowing if you can lose your home in bankruptcy can be daunting so reach out. We are more than happy to help you work out the options that are available to you.

I should also mention that persons who have monies from a personal injury can use that money to save their house and retirees can use monies they have in their superannuation fund to save their house, provided they are bankrupt before the money from their superannuation fund is accessed.

There is a load of options, depending on your circumstances. To explore options available to you give me a call on 1300 794 492 or email

Can Bankrupts Rent Property?

We often receive calls from people, concerned that they will have trouble renting a property once they are bankrupt. I do not think it is the case of not being able to rent a property but possibly the process of obtaining a rental may take a little bit longer. In particular, those persons going from owning their own home to renting as they will have no rental references.

Tips, if you need to find a rental property are:

  1. Make sure all your utility bills (eg electricity) are paid up to date so that those services can be transferred to your new rental property.
  2. Make sure you have the money for the bond and the first two weeks of rent
  3. Make sure you can afford the rent and live comfortably going forward. Financial stress must be a thing of the past.
  4. If you are downsizing, sell the excess furniture before moving to the rental. If you sell your furniture after you are bankrupt, you keep the money from the sale.

If you would like to have a chat about your rental situation, call on 1300 794 492 or email

Do I Get To Keep My Furniture?


Yes, rest assured that you keep your household furniture and effects. That’s right: clothes, furniture, kitchen appliances, washing machine, the TV and the stereo, and items mainly used by any children or students in the house.

The only type of item from your home that you would have to put in the bucket would be something like antiques or works of art. The leather lounge from Harvey Norman is safe.

That being said, don’t rush out and buy a new fridge or something similar on your store card and then go bankrupt. Something that blatant could be viewed as fraud and severe penalties can apply. Be honest in all of this. If you’re thinking about bankruptcy, use common sense, not your credit cards. If your furniture is rented, keep up your rental repayments if you want to keep that item of furniture. If you do not want to keep your rented furniture, give it back and any further rental money payable will be caught by your bankruptcy. 

However, if you have items such as boats, caravans, or classic cars in the garage, they will be sold by your Bankruptcy Trustee. If this causes you concern, I recommend that you give me a call on 1300 794 492 or email and we can discuss your situation and available options, it might be as simple as organising for a family member to buy them at auction valuation from the bankruptcy trustee. Bankruptcy also puts an end to shares and other investments but remember your super is safe. You cannot own any of these things until after you have been discharged from bankruptcy.

Will I Lose My Car If I Go Bankrupt?

The other important item to think about is transport, and in this day and age transport can also be about your safety. Don’t worry. You can keep vehicles worth up to $9,100 at auction value, or if it is still on finance, it can be worth up to $9,100 more than the amount you owe.

In reality, cars are rarely worth enough (auction value) for your Trustee to claim them and put the proceeds in the ‘bucket’. If you still owe any money on the vehicle that is particularly true, because the bit you actually own – if any – has to be worth more than $9,100 and it rarely is.

If the car is owned by two people – say, husband and wife – and you both go bankrupt, you can have a car that is worth up to your combined value, $18,200.

Here’s an example that might explain things a bit more clearly. Your car is worth $20,000 auction value but you still owe $16,000 on it, so your equity is $4000. That’s under the $9,100 cut-off point so your Trustee won’t take the car. Naturally, your payments must be up-to-date when you declare bankruptcy, and you must keep paying.

If the car is only worth $12,000 and you owe $15,000 on it, your equity is a minus figure ($3000), so the car is yours to keep. Again, the payments must be up-to-date and stay that way.

However, if your car is worth $20,000 but the $16,000 you owe is through an unsecured loan, then for bankruptcy purposes, you have a car worth $20,000. Your trustee would sell the car and give you $9,100 of the proceeds to buy another vehicle. The balance goes into the ‘bucket’ for distribution to your creditors.

Can I Keep My Work Tools If I Go Bankrupt?

If you have tools to do your job – your tools of trade, you can keep them up to an auction value of [protected_property property=\”tools\”].

From experience, second-hand tools don’t fetch much at auction these days, so your tools should be covered by this allowance. This allowance is an important part of the bankruptcy process, as it allows you to maintain your income by having access to the tools necessary for working. This means that even if you become bankrupt in Australia, you can still keep some of your vital equipment and keep earning money. However, the trustee will need to assess how much these items are worth before they grant this allowance – so make sure you provide all relevant information regarding their value when submitting paperwork during the bankruptcy process. If not, it’s another thing we can help you with. If you would like to have a chat about this please call on 1300 794 492 or email

Also, a quick summary of other things that may be relevant to for you to consider is:

  • You may be able to remain living in your home, depending on your circumstances and/or support from family or friend
  • To rent a house/unit once bankrupt it could take longer than normal
  • Your normal household furniture and effects are safe
  • You can have cars when bankrupt up to a set value of [protected_property property=\”vehicles\” number_of_vehicles=\”1\”auction value
  • You can own tools and equipment to earn an income up to an auction value of[protected_property property=\”tools\”]
  • You can save without limit from your wages during bankruptcy
  • If you have traded in your own name prior to bankruptcy, during bankruptcy you may be able to collect and keep those debtors from the business

Ok, we have covered your housing, furniture, transport, and tools of trade. You should be good to go forward and start living without debt. If you have any other assets that you would like to discuss, give me a call on 1300 794 492 or email