FAQs | What Happens When You Become Bankrupt?
Any non-employment money you are gifted while bankrupt will belong to the bankrupt estate – you will not be able to keep that money.
If you receive a gift of money that is employment-related, then that money will be included as income in the trustee’s calculations to determine whether you will be required to pay income contributions to your bankrupt estate. If your income including the gift is below your income threshold you will be able to keep the money. If your income including the gift exceeds your income threshold you will lose 50% of the amount by which your income exceeds your income threshold.
If family want to gift you money to help you get going again, they should wait till you are discharged from bankruptcy, before gifting you the money.
Likewise, if your family wishes to make an offer to your creditors for your bankruptcy to be annulled, they should not pay that money to you. The offer should be put to your trustee and the money should be paid by the family member directly to the trustee’s trust account.
Nicholls & Co have a complementary ‘help desk’ to answer your questions on bankruptcy. Call Nicholls & Co on 1300 060 122 or email email@example.com.