Legal Question in Bankruptcy in Australia
Bankruptcy and Payouts
What I wish to know is this:
If somebody injured themselves, and lodged a claim to sue, and during the proceedings, declared themselves bankrupt, would the bankruptcy act be able to access any of the monies recieved from settlement. Also, would the Act be able to claim on any assets (such as real estate) purchased with the settlement monies
1 Answer from Attorneys
Re: Bankruptcy and Payouts
The Bankruptcy Act sets out the property owned by an individual which is divisible by the bankrupt's trustee for the benefit of the bankrupt's creditors.
The Act specifically excludes- "any right of the bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt...and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury...".
The issue of assets purchased with the compensation is dependant on the value of assets acquired from the fruits of the compensation claim. Property purchased wholly or substantially from the compensation would be protected.
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