What can I keep when I’m Bankrupt – The bankruptcy means test.

Any time people stress over Bankruptcy, they fret about just how it will affect their day-to-day lives, and whether they will be able to retain their house, vehicle, tools, and other important possessions.

Among the ways that we can work out this out is by utilizing the insolvency means test. It is something that we take our clients through to show them just how they may or may not be affected, and what Bankruptcy will mean to them.

Personal and household items

Your valuables are always going to be a key aspect of concern with Bankruptcy in Australia as there is usually an irrational worry that someone will arrive to your house to swipe all your stuff away, repossess your couch, the television, even the coffee machine. However this is never ever going to be the case with pure insolvency because often they do not care about these belongings. There are a few intriguing exemptions though with Bankruptcy and belongings so if you have distinct worries about this make sure that you get a bit of advice initially or call us here at Bankruptcy Advice on 1300 879 867.


With Bankruptcy you could be impacted if you have expensive tools. The rules state that you may keep tools of trade up to a limit of $3,700. However bear in mind that this is founded upon ‘current cost’ so if you purchased your tools for $8,000 5 years ago, they are likely to be worth far less nowadays. So it is worth thinking about how much you would expect them to be valued at, or how much you could receive for them if you needed to sell them. But overall, the government doesn’t want personal bankruptcy to be a barrier to you doing your job, so they don’t want to refuse you accessibility to your equipment. It is quite a good part of Bankruptcy, but sometimes might be complicated. So when it relates to tools of trade, you don’t have to worry just call us here at Bankruptcy Advice for some suggestions.


Individuals are constantly worried about how Bankruptcy will impact their motor vehicle. So the rule is that you can retain one vehicle or motorbike up to the market value of $7,600.

This takes into account current value, as well as the equity. What does this mean? Well, equity deals with the sum of money you have essentially put into the vehicle, and how much is on a car loan. If you have purchased a car for $10,000 without having a loan, then the car can possibly be sold for that quantity, and $10,000 can be raised to pay off your bankruptcy debts. On the other hand, if you got a vehicle loan for that quantity instead then there would be no benefits to selling off your car.

How do you value your car? Easiest method is to just have a chat to a second hand car dealership and ask how much they might provide you for it– that will certainly present you a rough idea regarding how your vehicle will be affected by this Bankruptcy procedure. At that point you just need to think about the worth of your car loan or financing plan, and whether you are below or over the $7,600 threshold.

If your car is worth more than these threshold amounts get some help, at Bankruptcy Advice we help individuals work through their possibilities when it relates to cars.

The Family Home

Similar to with Bankruptcy and cars, the approach that will be taken to your home will depend on equity. If there is no equity in your home, then there is no purpose in forcing you to sell it. If there is no funds to be made by taking the house off you, then they are hardly ever going to bother. For instance if you possess a house worth $400,000 and you owe the financial institution $400,000 then more than likely you will be able to retain your residential property after bankruptcy.

The worst part about all this though is that going bankrupt does not take into consideration emotions or justifications– you will not just be able to keep your vehicle or house because you ‘need it’ or considering that you have a powerful emotional attachment. Bankruptcy can be harsh, but that is why you should make sure you speak with the right people. Don’t jeopardize your family home by assuming or wishing you will have the capacity to maintain it post-bankruptcy because you need to dwell somewhere.

If you are worried over your home or any other part of this Bankruptcy Means Test, then call us at Bankruptcy Advice on 1300 879 867 if you want to know more about Bankruptcy and Houses or almost anything to do with Bankruptcy. We are here to really support you. Visit our website for a lot more information, www.bankruptcy-advice.com.au.

We provide a Free- No Commitment Consultation so call us today 1300 879 867.