What happens to assets in a bankruptcy?

You will no longer control your assets.

The following assets are not included in your bankruptcy (However, they must be disclosed to the official receiver, who will decide whether you can keep them):

• tools, books, vehicles and other items of equipment which you need to use personally in your employment, business or vocation;
• clothing, bedding, furniture, household equipment and other basic items you and your family need in the home.

Generally, you can keep the above items unless their individual value is more than the cost of a reasonable replacement.

The official receiver/trustee will take control of all your other assets on the making of the bankruptcy order.  He or she, or any insolvency practitioner who is appointed as trustee, will dispose of them and use the money to pay the fees, costs and expenses of the bankruptcy and then your creditors.  If appointed, the insolvency practitioner's fees for acting as trustee are also paid from the money raised by selling your assets.

The trustee may apply to the court for an order restoring property to him or her if you disposed of it in a way which was unfair to your creditors (for example, if before bankruptcy you had transferred property to a relative for less than its worth).  The trustee may claim property which you obtain or which passes to you (for example, under a will) while you are bankrupt.

If you have made a claim against another person through court proceedings, or you think you may have a claim (a right of action) against another person, the claim may be an asset in the bankruptcy.

Getting in touch with an insolvency expert for free debt advice is as easy as picking up the phone.  Call the Leeds Debt Advice Helpline on free phone 0800 169 1536