The purpose of bankruptcy is to ensure that any funds that can be put towards your debts are distributed fairly to your creditors. If you do not have any funds, they will not get anything – if you do, though, it is your Bankruptcy Trustee’s job to ensure that they are realised and spread out accordingly. Funds for your bankrupt estate can come from your income and any assets that you have. During the period that you are bankrupt, which is usually three years, these funds must be declared to your Trustee and surrendered if requested.

When you first become bankrupt you must disclose to your Trustee any assets that you currently own or have previously sold or transferred, and these may need to be surrendered. Any assets that you purchase or acquire after you first become bankrupt, but still within the period of the bankruptcy, are known as “after acquired property”. After acquired property can be something tangible, like a house or a car, but also liquid, as in a lottery winning or a gift. If you come into possession of anything at all while you are an undischarged bankrupt, as in cash or property from an inheritance, bequest, gift or lottery winnings, you must tell your Trustee and surrender it to them.

If you were to save any of your income, and that income has previously been declared to your Trustee and assessed, it does not count as “after acquired property” and you can keep those savings. But if you were to then purchase an asset with those savings, it would technically be after acquired property and you would need to surrender it. So whilst you can buy assets while you are bankrupt, you would not be able to keep them – it is best, then, to wait until you have been discharged.

For more information on how bankruptcy affects your assets you can call us on 1800 462 767. Our consultants have years of experience giving bankruptcy advice, and are led by a Registered Trustee in Bankruptcy.