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Your Assets


Bankruptcy and houses are a daily subject for us and have been for years. We have a strong working knowledge on the matter and know that under certain circumstances houses can be saved during bankruptcy with the full authorisation of your trustee.

Bankruptcy does not always have to result in the loss of your property

There are circumstances and conditions under which your house may be saved. Alternatively A1 Debt Assistance can explore a Debt Agreement option with you which allows for you to hold more equity in your home compared to the tougher restrictions with bankruptcy and houses. The Debt Agreement threshold amount is indexed and gets reviewed on a regular basis. Currently you can have assets to the value of approximately $110k. This includes your car and other assets you may have. If these are under jointly owned then it will be divided by 2.

A Mortgage is a secured loan, as such, you can choose to keep making the payments if these are up-to-date at the time of declaring bankruptcy. Read on for a more detailed explanation of the equity issue or call us now and we can try to establish if, or how your house could be saved.

In a joint ownership a pay out of the bankrupts share of the equity at the start of the bankruptcy may be viable. This will require the non bankrupt party to make an acceptable offer to the trustee of the bankruptcy estate. Moreover, if you have joint ownership and both/ all parties enter into bankruptcy, you may be able to engage a family member or friend to offer the trustee to purchase your equity in the property.


Able to keep the house

Your mortgage is $400,000 and yet the value of your property is $395,000. Your repayments are up to date and whilst you are struggling, you can continue to make the repayments if you did not have all of your other unsecured debts, which will be written off in your voluntary bankruptcy. There is no point in the bank or the trustee selling your home. If they sell this property you would incurr additional debts, such as, the cost of the real estate agent and associated costs, usually around $15k for a property of the above value. Nonetheless, whilst incurring more debts is untenable at this stage, the Trustee or Government appointed Trustee, can (in most cases) put themselves on the title of your property, or place a caveat over your property. If your property increases in value, they then have the right to sell your property and repay your debts – this goes beyond the normal term of your bankruptcy and you could find that your house will be sold 6 years later for example.

A1 can provide you with the best option and explain possible alternative options to secure your home. For example, if a 3rd party purchases your share of the equity from the Trustee at its market value. In a soft market, homes are likely to decrease in value or remain at current values for some time which will give you some time to regroup and although the house is likely to increase in value you may have had time to recover from your financial woes and can negotiate a way of buying back the equity in your home from the Trustee in a lump sum or possibly over an agreed period of time. If the house is jointly owned and only one party has to declare bankruptcy, there is always the option that the joint owner can purchase your share from the Trustee. If there is a zero value, this can happen at an agreed value with your Trustee, for the Trustee’s nominated fee. This transaction can remove the trustee from the title/ caveat and frees the joint owner from the stress of not knowing what will happen to the property in the future.

Unable to keep the house

If the sale of your property would discharge the existing mortgage over that property as well as cover all selling costs and you are still left with a reasonable profit that can pay off some of your unsecured debts – your Trustee has to sell your house as it is his duty to your creditors. The profits will firstly pay the fee of the Trustee and secondly your creditors. You may be able to come to an arrangement with your Trustee to pay your debts and hold the sale of your property for an agreed term, if you have special circumstances in which it is seen as reasonable that you will have funds coming which allow you to do so.

A1 Debt Assistance will advice you on your property options as part of our service and  for no additional fee. A Trustee can arrange a Heads of Agreement with a non bankrupt party to purchase your share of equity in your property and this will remove the trustees vested interest. Tell us your situation and we can tell you how to keep your house. It can be done, the less equity you have the better. Don’t make the mistake of signing your house over to someone else or sell it below market value, this is illegal. Contact us before doing anything like this and you may be surprised what can be done and you may get to keep your house without breaking the law. Alternatively, remember to ask us about a Debt Agreement as these are far more flexible for home owners who qualify for a Part 9 Debt Agreement. Visit our Debt Agreement Page for more details information. Click here.

Please be warned:

Currently there are certain companies offering false promises ( exit from bankruptcy within 1 year and returning your house ) for an up-front fee of $25,000. This is bankruptcy fraud and you will lose everything including an extra $25,000!

If you hear of this or someone makes you such an offer – please contact AFSA and give them the details.


Bankruptcy and cars are the cause of much unfounded speculation and worry.

You fully own the car and do not have any secured loan against the title of the vehicle

If you are the owner of the car and have no loan against it, the value of your car cannot exceed $7600. This is the threshold. Any car with a value below this is yours to keep. However, you need to be careful with this valuation, even though a car yard will advertise a car for sale at a retail price, the actual value would be an auction value. So ask for the auction value – if A1 Debt Assistance handles your file, we do this for you, no need to do any searches. In the event that your car is valued at more than the threshold, the Trustee can arrange for your car to be sold and use the funds to pay your debts. You may also be able to negotiate the difference between the actual value and the threshold and pay this off to the trustee, thus keeping your car. This is at the discretion of your Trustee – a Government appointed Trustee is certainly your best option here. This also applies to a company car. In addition, if your car is fully owned and valued at a higher figure, a Part 9 Debt Agreement may be an option for you if you qualify. For more information visit our Debt Agreement page – click here.

You own your car, but it is the family car and half belongs to your spouse/ partner

Based on the same principle as above, your share of the car is still only $7600, however  the car can now be valued at $15,200. A word of warning – do not transfer your car into somebody else’s name prior to entering into Voluntary Bankruptcy. This is a form of deception and Bankruptcy Fraud, which will carry severe consequences.

You have a car loan or a secured loan against the vehicle

If your car is leased or under finance the value of the car now becomes irrelevant as long as you can afford to continue your regular loan repayments and your equity is not more than $7600. You have to be careful with this and A1 Debt Assistance will advise you regarding this if we handle your bankruptcy documents, such as the required Debtors Petition and the Statement of Affairs. The key is that your car becomes an asset if your loan is finalised prior to the completion of your bankruptcy term, which under normal circumstances is only 3 years. Many car loans have a balloon payment at the end and if you have this, then you will have difficulties re-financing your car at the end of the loan as you will not get a loan for the balloon due to your bankruptcy. To overcome this, you need to contact your credit provider and explain your situation. Tell them you are entering into voluntary bankruptcy and that you would like to change your loan so that the balloon payment is included in the total loan now and your repayments will stay the same but will be paid out over a longer period. As long as you are honest with your lender they will usually do this for you. They know that repossessing your car now is not in their best interests. Given that you are debt free once you are officially bankrupt, the lender is aware of the fact that you are freeing up money to place you in a better position to pay your car loan. It’s important to be honest, otherwise it means you obtained credit by deception. If we handle your full service, we will help you with these negotiations.