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Is my superannuation safe if I become bankrupt?

Is my Superannuation safe if I become Bankrupt? Some individuals that realise they are heading towards the bankruptcy route will try to funnel their assets in superannuation for an "assumed" protection of these monies and assets. This is simply not the case. The truth about bankruptcy: Although filing for bankruptcy is meant to give people a fresh start by relieving burdensome debt, you must consider pros and cons if you are thinking about this option. According to the Bankruptcy Act, superannuation is usually a protected asset and falls under the category of ‘non-divisible' property. Non-divisible property is property which a trustee cannot take from a bankrupt. In relation to super, it is the interest that a bankrupt has in a regulated superannuation fund or a payment from such a fund received on or after the date of bankruptcy that may be at risk. The Bankruptcy Act was modified with effect from 28 July 2006 to prevent debtors from funneling their assets into their superannuation to protect their monies from creditors. When a trustee is looking at contributions made after this date and prior to bankruptcy they will consider the following; Were the contributions made to the superannuation fund out of character? Would the assets have formed part of the bankrupt's estate and otherwise been available to creditors Is the superannuation fund complying and regulated? If the answer is ‘no’ to the first two questions and ‘yes’ to the last, then it is very likely that the superannuation funds


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Financial Planning and Credit services are offered through Modoras Pty Ltd ABN 86 068 034 908. Australian Financial Services and Credit Licence No. 233209.
Accounting services are offered through Modoras Accounting (QLD) Pty Ltd ABN 81 601 145 215, Modoras Accounting (VIC) Pty Ltd ACN 145 368 850 and Modoras Accounting (SYD) Pty Ltd ABN 18 622 475 521

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