after bankruptcy order is made

[Micaw]

1. What happens if you sell normal household items after the order is made?
2. Can you keep the proceeds or do these need to be declared and the proceeds handed over to the court?
3. Also, what constitutes normal household items eg Would a performance chip for a car (but not fitted to a car) fall into this category?

[MelanieGiles]

Hi Micaw and welcome to the forum

Normal household items are exempt from bankruptcy, and you can keep the proceeds of sale. What is a performance chip and how much is its value?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

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[ianmillington]

The legal principle is that your domestic effects (i.e required to meet your basic domestic needs) are exempt so you can sell them in principle. However, there is an "Excess value" Rule. Everyone can have a dining table and chairs for example, but if yours is an antique worth thousands of £s then the Official Receiver/Trustee can require you to hand them over to replace them with something more modest.

Without wishing to be pedantic, depending upon the circumstances, if you were to sell any of these effects without replacing them it might be difficult to argue, if you have to, that they are actually "required". A theoretical point, but if the item is valuable then it could potentially be an issue.

The chip? If fitted to the car I would argue it's part of the car so if the car is exempt so would the chip be. If not fitted then it wouldn't be I think. However, as in any other insolvency, the Office Holder has to decide whether the expected realisations will comfortably exceed what the assets will cost to seize and sell and without a significant margin it will probably not be worth the aggro. How much did the chip cost you?

Ian

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