Do I have assets?

When you are in a financial condition where you are not able to pay off your debts, you can declare it in a court and ask for the debts to be written-off. Once bankruptcy has been declared, the court levies strict rules on you and your assets and the way they are dealt with. The court appoints a trustee to look into your assets determine their status before they can be sold to pay off your creditors. Read on to understand how each of your assets can be handled by the court and about the assets that you can claim at the end.

Soon as you declare bankruptcy, the firs step the court would proceed with is to appoint an official person who will take charge of all your assets and will assist you in a smooth bankruptcy procedure. He would first submit a report to the court to seize all your assets and freeze all your bank accounts. It is your responsibility to let know the appointed official receiver about all the assets you possess whether it s in your name or in a joint name.

Property Assets
Any freehold or leased property procured by you even if it is a joint property is seized by the court and is sold for paying off your debts. But there are exceptions to this condition in case it is a family household or is a joint property. If the house is a family household and you and your spouse and/or children is residing in it, the official receiver would provide you with sufficient time up to an year to move your family to an alternate location. In case the asset is a joint property with the ownership being shared by your partner or your relative, the court provides your partner with the option of buying your share out of it. It can also alternatively decide upon selling it to a third party and releasing the funds that belong to the second owner of the property. In cases where the house has been on rent, it does not matter much other than your landlord being informed about your bankruptcy.

Vehicles
During the period of bankruptcy, the court allows you to own a single vehicle whose value is not greater than £2500. The underlying fact is that the court allows you to own a vehicle for the sole purpose of your necessity and not for luxury. The official receiver will recommend the court to sell any vehicle greater than £2500. In cases where your work demands a special type of vehicle, which might cost more than £2500, the court allows such vehicles. Also if your vehicle has been sold, the court will allow you to buy a vehicle that is less than £2500. During your bankruptcy period, you will not be permitted to hold more than one primary vehicle and any other vehicle held might be sold off to pay your debts.

Furniture
If you are bothered about your most coveted furniture being seized, do not worry. All furniture that is essential and reasonable can be retained even after your bankruptcy declaration. The items deemed luxury and expensive might be moved by the court so as to make a considerable amount of payment towards your debts. Luxury and expensive items are considered for sale and examples of such items are plasma television, high-end audio systems, etc. In cases where you the furniture might belong to a third person like relative or friend, the court would require proofs to be furnished before deciding on its ownership.

Pension
You might be concerned about your pension fund be utilized for debt settlement, but it is normally not used. But the court might temporarily ask you to withheld payment for the funds during your bankruptcy period. Also any windfall or interest received by means of a will can be considered as a potential source for payment of debts.

Income Wage
During your bankruptcy period, the official receiver may decide to analyse your monthly income and verify if you can make any monthly payments towards your debts. These are known as income payment orders and normally continue for a period of 3 years with frequent monitoring to modify the amount based on your income and needs.

In short, you are expected by the court to be honest and submit all details of assets held by you. The court will allow you to hold the basic essential assets required during your bankruptcy period and utilize the rest in the interest of your creditors.

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