Only some assets are protected in bankruptcy! A bankrupt can keep the following assets up to the following limits:
A bankrupt cannot own a car worth more than $7,350. If your car is worth more than this amount, your Bankruptcy Trustee will be able to sell the car, or you will need to pay the excess amount to your estate. For example if your car is worth $10,000 you would need to pay your Bankruptcy Trustee the excess of the amount above. This amount is indexed every six months by AFSA.
A bankrupt can retain tools of trade worth up to $3,600 if the bankrupt is a trade person. For example if you are a carpenter you could keep carpentry tools worth up to $3,600. This amount is indexed every six months by AFSA.
A bankrupt can retain necessary household goods for domestic use like:
A bankrupt may be able to retain items of sentimental value, however, disclosure of these items must be made to your Bankruptcy Trustee and creditor approval must be obtained for the items to be retained.
Superannuation is also protected unless the bankrupt has made lump sum contributions into the fund shortly before becoming bankrupt. The superannuation fund needs to be a regulated superannuation fund.
If you buy assets whilst you are bankrupt, the asset can be claimed by your bankruptcy trustee as after acquired property. This includes gifts, lottery winnings or inheritance.