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Common Questions

Will I lose my superannuation in Bankruptcy?

What Does the Law Say About Your Superannuation When You Are Declared Bankrupt?

The thing is, we get a lot of clients asking us if they can lose their life savings that lie in superannuation. This is a good question and a very valid concern to have as this doesn’t just affect you now, but a lot of variables in the latter part of your life. It also impacts the people around you if you are unable to take care of yourself one day.

Fortunately, the Australian Bankruptcy Act does classify it as a protected asset and you can rest assured that it most considerations, your super will not be taken into consideration when all assets need to be liquidated and distributed among your creditors.
 

If you’re struggling and don’t know where to start, contact Andrew today for a free consultation.

There are exceptions to be aware of.

If you are unsure of this, let us help you there. We can guide you by having a look at your paperwork and what the law says. We can also search the Federal Government Super Fund database where your investments will be listed and or classified accordingly. This will allow us to advise you on the best way to proceed.

These exceptions are set in place to prevent people from moving assets around in an unethical manner (specifically paying it into a superannuation for protection purposes), only to move it out again after the bankruptcy process has concluded. This has to be the case as it protects all parties and ensures fairness.

Despite the protected status of your superannuation, be mindful that there are exceptions. It can lose its protection status if:

  1. Your superannuation fund is not held in a regulated fund,
  2. It is not held in an approved deposit fund,
  3. If it is a government / public sector scheme it will those rules and protections are excluded from the definitions of the Bankruptcy Act.
  4. If you withdrew any funds before you entered the Bankruptcy process. This means that if you paid off your house with a lump sum, then the house in question will be considered fair game.
  5. Pensions are different, and they do not enjoy the same level of protections as superannuation. Pensions are seen as an income which changes the definition of its application in a Bankruptcy process. There are scales that determine how much of the pension income can be considered as an asset to during a Bankruptcy process.

Call or Text Andrew (24×7): 0439 844 422 | Free Advice Line: 1300 887 210 | Email: andrew@bankruptcyadvisorycentre.com.au

What Is the Best Course Of Action?

Truth be told, this is something that the appointed Trustee, partners like us, or your financial advisor can best advise on. We will give you all your options by laying out what the law says and how you are entitled to certain protections.

Most of our clients stay clear of their superannuation all together so that no party can lay their hands on it as additional contributions or lump sum withdrawals immediately expose you to potential losses.

It might seem to be a good idea to draw on your superannuation as opposed to selling your car, home or restructuring debt. We do however always caution clients about this as the consequences in the long term are not always positive.

In the end, it is best to raise as much capital from sources that do not touch your life savings and produce a better chance of getting out of this in a stronger financial position that you would have been when raiding your life savings.

The one thing that an appointed trustee might do is to freeze your superannuation whereby continued contributions to the fund are halted. This can be a good thing due to the fact that your monthly expenses can be channelled towards the elevation of the debt burden the trustee needs to remedy.

The only downside of this is that your savings will grow much slower and there might be some charges and penalties that affect your overall return. It might sound severe, but at least you are not losing all of your savings which makes it a good alternative.

Reviews

  • I made an appointment with Andrew after finding him on google. I was nervous and apprehensive about what to expect but he made the process of bankruptcy extremely uncomplicated and stress free, allowing myself the opportunity to get the fresh start I was so desperate for. Thank you Andrew I could not recommend you enough.

    Kristy
  • Making the decision to go bankrupt was not easy however once I had spoken to Andrew i felt all my anxiety disappear. Andrew does not judge you and he has an innate ability to put you at ease. He took care of the whole process for me again reducing the stress involved with completing paperwork.
    Thank you very much.

    Hayley Eastough
  • I will definitely recommend Andrew Bell to anyone contemplating bankruptcy. Don't wait! Andrew is there to help. With his knowledge, he can advise you of the best path to take and assist with the mind boggling paperwork.

    Best of all, he is there for you through your entire bankruptcy period. Get your life back, it's not as bad as you think. Thank you Andrew for lifting the burden and allowing me to move on.

    Karilyn Mahon
  • I saw Andrew for 'advice only' on possible bankruptcy due to a divorce. Left an hour later with the paperwork all done and feeling like a new person!

    Andrew was extremely welcoming and made me feel so comfortable with my decision to proceed immediately.

    This was the best investment I have ever made and cannot speak highly enough of Andrew. He doesn't just give excellent service his follow up afterwards is amazing. Thankyou Andrew you made my 'new' life so easy to achieve!

    Vicki Johnston
  • Andrew was very helpful in helping me through the bankruptcy process, as a single mother left with a massive debt from my ex and our previous marriage. I was struggling to keep my head above water on a week to week basis.

    Andrew made me feel at ease immediately and helped me every step of the way, he happily and professionally answered any and all questions I had before, during and after the process. Thanks so much for your help Andrew!

    Aisha Edmonds
  • Would highly recommend Andrew to anyone having financial difficulties. Andrew made me feel very comfortable - he took care of everything and keep in regular contact with me throughout the whole process.

    Service was fantastic and he also keep in regular contact with me when everything had been finalised Thanks Andrew! can now get my life back on track.

    Cassandra Walsh
  • Very prompt service and excellent source of knowledge and information, I highly recommend Andrew's service for a quick turn around of circumstances.

    Eve Damjanovich
  • Andrew put my mind at ease in one easy appointment. Very satisfied with the outcome and service provided. Highly recommend Andrew.

    Tracey Douglas
  • Andrew was a steadying hand with his advice.Showing that things aren't as bad as first thought nor any obstacle insurmountable. If you have questions needing answers, Andrew is the person to ask. Thanks for your advice Andrew.

    Shane Thompson
  • Andrew was very knowledgeable, caring, helpful and compassionate when I went and saw him. He made me feel that I wasn’t the loser and failure that I thought I was being. Even down to the box of tissues on the table.. which I needed. Highly recommend to go see Andrew if your struggling. There is life after!

    Joanne Parker
  • Andrew and his team do an excellent job of helping their clients with bankruptcy advice and it is a pleasure to work with him.

    Gareth Lane
  • Don't hesitate contacting Andrew, I was stressed, struggled sleeping through debt. Andrew put me at ease. He listened to my situation and we decided on my next move. Andrew is professional and easy to talk too. I would recommend highly to anyone who wants help to give him a call. I appreciate your support Andrew. Regards Brett.

    Devs Devs
  • Andrew has given me back my life!!! After living paycheck to paycheck, I didn’t know what to do. Until I made the big step and booked an appointment with Andrew. As soon as I left his office I felt a huge weight lifted!!!

    Deezy H
  • Andrew was prompt, organised, friendly and efficient with the processing of my documents and made everything very simple for me so I didn’t need to deal with the added pressure and stress. Thank you Andrew for allowing me to start afresh and getting it done within a matter of weeks.

    Kristy-lee Ellwood

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