If you have €20k or more secured or unsecured debt, and have explored all other insolvency options as per the Insolvency Act 2012, bankruptcy can often be your best option for restoring financial control.
However, when you’re facing bankruptcy with unsecured assets, the fear of losing a lifetime of assets can be an extremely daunting one.
But there are things you can do to ensure you retain your most important assets, such as negotiating the terms of your assets transfer and optimizing how your assets are organized.
At Gibson & Associates, our Insolvency and Bankruptcy solicitors are highly experienced at negotiating effective bankruptcy agreements that can benefit you and your family in the long run, as well as satisfying the demands of your creditors.
Click the links below to find out more about bankruptcy and protecting unsecured assets. To find out more about bankruptcy in general, take a look at our bankruptcy page.
What Happens to my Assets Once I’m Bankrupt?
Once you become bankrupt, your assets are transferred to your Official Assignee, the professional who oversees your bankruptcy. They will then sell them in order to pay your costs, expenses, fees and certain priority debts, such as taxes, and then distribute the remainder among your creditors.
Everyone is entitled to retain some assets as ‘excluded items’ from bankruptcy to a value of €6,000. However, this value limit can be more if the High Court allows.
Generally, these include assets such as:
- Tools or equipment relating to trade
- (This can include vehicles needed for work)
- Necessities for your family and any dependent relatives living with you
- (this broad term can be negotiated depending on your circumstances)
Once you’ve been declared bankrupt, your Official Assignee can claim any assets you may acquire during your year of bankruptcy, and will sell them to benefit your creditors. These often include things like inheritance money or property.
Protecting Family Homes
The asset people most commonly seek to protect when going bankrupt is the family home. Protection of this asset can be negotiated, but depends on a number of different, personal factors, and can be a complicated task to carry out. But it is not impossible, and an experienced bankruptcy solicitor can ensure you get the best result possible for you.
Bankruptcy and The Family Home
When you file for bankruptcy, your Official Assignee will only sell your family home with the prior permission from the court, regardless of whether or not you own it by yourself or with another person.
If this permission is sought, the court will balance the interests of your creditors against the interests of your family, and may decide to postpone the sale of your home. Often, if the bankrupt has young children or is looking after an infirm relative or someone with special needs, a granted order for sale will be postponed.
Often, this postponing can buy you time to make other arrangements.
If the courts do decide to sell your home and you hold property jointly (for example, with your spouse) your bankruptcy will cause the joint ownership to be split between the Official Assignee and your non-bankrupt co-owner.
However, Official Assignees tend to be pragmatic and often agree to sell the individual’s 50 per cent share of the house to the spouse.
The Official Assignees will also sell the property to another family member, although transfer of the family home to the spouse is the most common and obvious tactic.
If your home is not sold, the Bankruptcy (Amendment) Act 2015 provides for ownership of your home to be re-vested in you, subject to any outstanding mortgage, 3 years after you have been adjudicated bankrupt (with some exceptions). This change came into effect on 29 January 2016.
Securing Assets Before Bankruptcy
There are ways to protect assets ahead of bankruptcy, but there are many legalities which come into play when bankruptcy is later declared. Creditors can dispute any transferred assets completed 2 years prior to claiming bankruptcy, and all previous transfers in that timeframe must be disclosed to the Official Assignee and the courts.
However, negotiation and planning with the help of experienced legal professionals can help you to protect key assets. For this reason, choosing a highly experienced solicitor is crucial.
The Importance of Instructing a Solicitor
Instructing an experienced and tactical solicitor will make a huge difference to your future financial freedom. By helping you make informed and strategic decisions, a legal professional can ensure the best possible outcome for you and your family’s assets.
At Gibson & Associates, our personal insolvency and bankruptcy solicitors are hugely experienced and diligent, and we pride ourselves on navigating the intricate ins and outs of the bankruptcy and insolvency process in Ireland to ensure our clients get the best results possible.
Our case studies demonstrate how we’ve helped people in all sorts of situations resolve their financial hardships.
Contact our team today on 1890 989 289 or email us to start working towards a brighter future today.