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Life During Bankruptcy - Your Household Furniture and Effects

Your household furniture and effects are protected for you. This protection is not just for your furniture and household possessions when you become bankrupt, it includes items you may subsequently purchase.

The protection for household furniture applies to all normal household furniture that you may buy from a furniture retailer like Harvey Norman.

During bankruptcy, you can save from your wages and your savings are safe provided they remain in your ordinary bank account. You can use your savings to replace furniture and white goods. If you have minimal household furniture, you can buy furniture and white goods from your savings to create your home.

If you rent all or some of your household goods, you will be required to continue making the rental payments to continue using these items. In the alternative, you can hand the goods back and any liability from the rental agreement will be caught by your bankruptcy.

If you have your household furniture in storage, and you are behind with the payment of the storage fees, the storage debt will be caught by your bankruptcy. However, it is common for storage companies to claim a lien over the stored goods till the outstanding rent is paid. If this is your situation, a lien is considered a secured charge and bankruptcy will not stop the company from claiming a lien. However, once you have paid the storage fees and you can access your items, they will then be protected for you.

Insurance of your household furniture and white goods is your responsibility. Monies you receive from an insurance claim are protected for you to buy replacement items.

If you sell your household furniture and white goods, sale proceeds are protected for you to buy replacement items.

Once you are discharged from bankruptcy, your household furniture and white goods remain your property.

Household furniture that is not protected includes appreciating items like antiques and quality works of art.

To get further insight into how bankruptcy works, we recommend our article Getting On With Daily Life which can be accessed here

If you have any questions on bankruptcy or would like to discuss your situation, please give us a call on 1300 764 197 or email: hello@understandingbankruptcy.com.au and we will be happy to answer your questions.