My Possessions and Bankruptcy
Your household possessions are not normally at risk if you go bankrupt. You keep all of your clothes, furniture and electrical goods.
- What happens to your Household Possessions in Bankruptcy?
- Can you keep any Possessions bought on Credit?
- Are your Jewellery and Valuables at risk?
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What happens to Household Possessions in Bankruptcy?
Once you are Bankrupt you will normally be allowed to keep your household possessions. Items that are individually worth less than £500 based on their current second hand value are not at risk of being taken by the Official Receiver (OR).
This means you are allowed to keep your Flat screen TV, DVD player, laptop or tablet computer. You will also be allowed to keep white goods such as your cooker, washing machine, fridge freezer and all your other kitchen appliances.
It is unlikely that anyone will come to your home to check your possessions. The OR will only visit you if they believe you have valuable items that you have not declared.
Home visits by the OR to check up on possessions are very rare. They would only happen if your previous life style was particularly lavish or after a tip off from a third party.
What happens to Possessions bought on Credit?
You may have bought many of your household possessions using credit. It is quite common to buy items using a credit card, store card or from a catalogue.
If you go bankrupt your credit and store card debts are all included. However you will be able to keep all the things you bought using these facilities.
This is because what you bought normally falls within the category of reasonable household goods. Individually their second hand value is likely to be less than £500. As such they are of no interest to the the Official Receiver.
Recent expensive purchases using credit will be considered. If the OR believes you bought unreasonably expensive items on credit just be fore going bankrupt you may be asked to sell these.
What happens to Jewellery and Valuables if you go Bankrupt?
You may be worried about whether you will be forced to sell personal jewellery such as your wedding ring if you go bankrupt. The answer to this is no. In the same way as normal household items the Official Receiver is not interested in jewellery unless it is extremely valuable.
If you still own any household possessions which individually are worth more than £500 you do have to tell the Official Receiver about these. Items that would fall into this category are things like antiques.
If the furniture you use every day is valuable you may not be able to keep it even though it is functional. For example a dining room table would normally be considered a required household item. However an antique table may be worth more than £500.
You could be asked to sell possessions which individually are worth more than £500. Depending on the item you will be allowed to buy a reasonably priced replacement. However the balance would then have to be handed to the OR.
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