You will be able to keep your reasonable possessions if you go bankrupt. Only things of particularly high value may be at risk.
- Which possessions can you keep?
- Can you give assets away before going Bankrupt?
- How is the value of your possessions checked?
- Will you be able to keep your Pets?
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Will I lose my Personal Belongings if I go Bankrupt?
Your household belongings are not at risk if you go Bankrupt. Will you have to sell anything you own? Are you allowed to keep your car or will you have to sell it? To find out more please visit: http://beatmydebt.com/bankruptcy-frequently-asked-questions/how-does-bankruptcy-affect-my-possessions
Which Possessions can you keep if you go Bankrupt?
Your reasonable household possessions are not at risk if you go Bankrupt. You can keep your clothes, furniture and electrical goods including kitchen appliances, TV, laptop and ipad.
The only time any of your things would be at risk is if their individual second hand value is more than £500. Where this is the case you may be asked to sell the item and buy a cheaper replacement.
Normally the only possession you own that would fall into this category is your car. You are allowed to keep a car if you go bankrupt. However if it is worth more than £1000 you may be asked to sell it and buy a cheaper one.
If you are married your wedding rings are normally exempt from bankruptcy. However other jewellery worth more than £500 does have to be declared and may have to be sold.
Can you give your Assets away before going Bankrupt?
If you own a valuable possession you cannot protect it by giving it to someone else before you go bankrupt. If you did this within 5 years of applying for Bankruptcy the transaction can be overturned.
In other words the person who received the item can be forced to return it to the Official Receiver (OR). If they refuse legal action can be taken against them to recover the value.
You are allowed to sell assets you own before you go bankrupt. However you must be able to prove you received a fair market price. It is not acceptable to sell a vehicle worth £4000 for £100 to your friend.
The money received from selling any asset can be used to pay for reasonable living expenses. It could also be used to pay your bankruptcy fee. However any excess will have to be handed to the OR.
How is the value of your Possessions checked?
You have to list any assets you own that individually are worth more than £500 on your application form. If you list nothing the Official Receiver (OR) will normally trust the information you have provided is correct.
It is very unlikely that anyone will visit your home to check up on you. If the OR wants more information about any item you have disclosed they will ask for the source of the valuation so they can verify it.
Having said that the OR does have the power to investigate further if they feel you may be trying to hide something from them. They can make further investigations to uncover assets they feel you may not be telling them about.
If you are a home owner you will normally need to provide a written valuation of your property provided by an independent estate agent or valuer.
If I am Bankrupt will anyone come to my home to check my assets?
You have to declare any valuable assets you have on your Bankruptcy application form. How does the Official Receiver check that you are telling the truth? How likely is it that the Official Receiver will come to your home? To find out more please visit: http://beatmydebt.com/bankruptcy-frequently-asked-questions/how-does-bankruptcy-affect-my-possessions
Will you be able to keep your Pets if you go Bankrupt?
You will normally be allowed to keep your pets as long as they do not cost too much. If you have a dog or cat the expenses for things like pet food and insurance can be included in your living expenses budget.
The allowance you can included for your pets expenses will depend on your circumstances. Within reason the more pets you own the greater the allowance you will be able to include for keeping them.
The Official Receiver is unlikely to allow you to keep pets that are unreasonably expensive to maintain. For example if you own a horse you may have to give it up if you go bankrupt.
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