Legal Tip 98: Investing While Bankrupt

Discussion in 'Legal Issues' started by Terry_w, 29th Oct, 2015.

Join Australia's most dynamic and respected property investment community
  1. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    Bankruptcy and “after acquired property”

    What happens if a person becomes bankrupt and while they are still bankrupt acquires property. An example is an inheritance. This property will vest in the trustee and will go to creditors. But what happens if they invest while still bankrupt and make a gain?

    One recent case involved a bankrupt person who bought some shares with money from savings from his earnings (that was under the threshold for being seized). The shares did well and he wanted to sell the shares and use the funds to buy a car. The Bankrupt’s trustee in bankruptcy wanted to take the shares under their powers under s58(1)(b)

    The matter went to court and it was determined that the shares were ‘after acquired property’ and therefore able to be taken by the trustee in bankruptcy.

    Di Cioccio v Official Trustee in Bankruptcy (as Trustee of the Bankrupt Estate of Di Cioccio)[2015] FCAFC 30,
    MTR and Xenia like this.
  2. Xenia

    Xenia Best Adelaide Property Manager Business Member

    21st Jun, 2015
    507 South Rd ASHFORD SA.
    thanks Terry
    I really enjoy these
    MTR and Terry_w like this.