The thought of losing your superannuation can be terrifying, as one day it is going to be all that you have to live on. So naturally it is a big concern for people who are considering bankruptcy. The good news is that your superannuation is protected under bankruptcy and will not be touched. The only reason it would be is if you are found to have funnelled assets into your super fund because you know you are going to go bankrupt.

When you are declared bankrupt there are certain assets that you are bound to lose, such as property, shares and certain other things of value. Some assets, though, are “protected” – superannuation is one of these, along with household goods and personal effects, and a vehicle worth up to a certain amount. You would not be able to access your super to pay out unsecured debts and prevent bankruptcy, so in the same respect, it is not something that is touched when you do go bankrupt.

There is a section of the Bankruptcy Act, however, that prevents you from transferring or disposing of assets to “defeat” your creditors. To try to defeat your creditors is to know that you are in financial difficulty and then to plan to keep your assets from being sold so that your creditors can receive the funds. If your Trustee in Bankruptcy can see that you have transferred amounts of money into your superannuation fund prior to going bankrupt, they would need to investigate the matter, and if they determine that you have done so in order to keep the money from your creditors, those transactions can be reversed. You may also be subject to penalties under the Bankruptcy Act.

If you think that you will soon be made bankrupt, either by your own doing or against your will, it is essential that you do not move around any of your assets, be they physical or monetary. Seek professional advice straight away and ensure that you are not about to commit an offence under the Act. Our consultants at the Australian Bankruptcy Service are highly trained to deal with all aspects of bankruptcy. We also have a Registered Trustee in Bankruptcy on site who will be able to answer any complicated questions with accuracy. Call us on 1800 462 767 and get the right advice, right now.