What happens to my assets in Bankruptcy?
Upon declaring bankruptcy assets ‘that are not exempt or otherwise secured to a lender ( eg. car loan, mortgage on house,etc.) vests to the Trustee. Other assets acquired during the period of bankruptcy, such as lottery winnings or inheritance from a deceased estate, also vests to the Trustee.
The law, however, provides that you may retain certain property, including personal effects, such as necessary clothes and household furniture; property used in earning income, provided the value of the property is less than an indexed amount; property used as a primary means of transportation, provided the value of the property is less than an indexed amount (i.e. car or motorbike); property held in trust for another person, such as a child’s bank account (Note that it is not enough that you consider the account to be for your children – the name on the account MUST have the words ‘in trust’ on it); life insurance and endowment insurance policies and proceeds thereof; retirement funds and pensions; compensation from damages due to personal injury for pain and suffering only are an exempt asset.
Moreover, if you are earning an income that is more than the value of a threshold amount, you are required to make regular income contributions of 50 cents after every tax dollar above the indexed amount.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.