What if I receive money during my bankruptcy?

Money received during bankruptcy

Apart from your ordinary income, other money and payments you receive may: 

• form part of your assessable income or
• be an asset your trustee can claim. 

If you receive a payment and you're unsure which category it falls into, check with your trustee. Further below are some common payment types and how they're treated in bankruptcy. 

For information about changes in income see: My income or employment has changed (or may change). 

If your bankruptcy is administered by a registered trustee, contact your trustee.

If your trustee is the Official Trustee (AFSA), notify us of money received using the below form:

Can I keep my tax refund?

It depends on your circumstances. You must inform your trustee when you receive your tax refund. It’s important not to spend your tax refund before your trustee makes an assessment and informs you if they have a claim in the refund.

For more information, learn about bankruptcy and tax returns.

Can I keep my superannuation?

It depends whether the super is still held by the fund or if you have received it. In most cases, you can keep super balances held in a regulated superannuation fund, approved deposit fund or an exempt public sector superannuation scheme.

If you receive payments from a regulated superannuation fund: 

• After the date of bankruptcy: they are generally exempt.
• Before the date of bankruptcy: they are not protected and may be claimed by the trustee.

For more information on what happens to your super during bankruptcy see: What happens to my money?

The Australian Taxation Office has information about super payments and early access eligibility on their website at Early access to your super.

I'm getting an inheritance – can I keep it?

Normally no. If you receive an inheritance (or are notified you will be receiving a payment), you must inform your trustee.

For more information, learn about what happens to my money?

I'm receiving a redundancy payment, can I keep it?

Redundancy and leave payments you receive:

• prior to entering bankruptcy are an asset the trustee can claim
• after entering bankruptcy form part of your assessable income. If your income goes over a set amount you need to make compulsory payments.

You must inform your trustee if you receive these types of payments.

How are compensation payments treated?

The type, circumstances, components, and way which compensation is awarded impacts whether the trustee has claim to it.

If you receive a compensation payment, you must inform your trustee. Your trustee can request supporting documents to determine whether they will claim it to help repay your debts.

For more information see:  What happens to my money?

Can I keep gifts and prizes?

If you receive money during your bankruptcy, you must inform your trustee. This includes gifts from friends or family and prizes, such as winning a lottery. Your trustee can claim money you receive as an asset.