Upon the commencement of a bankruptcy, the Bankruptcy Act 1966 (“the Act”) provides for the vesting of the bankrupt’s property in the trustee (subject to certain exclusions – s116(2)).

“Vesting” of property means that the trustee becomes the owner of the property and is able to deal with the property for the benefit of the bankrupt estate.

The Act defines “property” as ‘real or personal property of every description, whether situated in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property’.

Discharge from bankruptcy does not have the immediate effect of returning property to the bankrupt and instead, there are provisions within the Act (s129AA, s127, s74 and s154) which set out the time limit in which a trustee must deal with property before it becomes the former bankrupt’s property again (“revests”) if the trustee hasn’t dealt with it by that time.

Generally, the time limit in which a trustee must deal with property is six years from the date of discharge from bankruptcy. It must be noted, however, that there are also instances in which the time limit extends to six years from the date of disclosure of the property by the bankrupt to the trustee.

Importantly, a trustee does have the power to extend the time in which they have to deal with the property, usually in three year allotments, by giving written notice to the bankrupt.

Ultimately, the date in which property may revest in a former bankrupt is dependent on the following factors:

  • the type of property
  • whether the property was owned at the date of bankruptcy or was after-acquired
  • whether the bankrupt disclosed the property to the trustee and, if so, when
  • whether the trustee has made a claim to the property

Should you or your client have any specific queries in relation to vesting periods in bankruptcy, please feel free to contact our office for assistance.

About the author

Benjamin Mitchell is a Senior Insolvency Accountant at HLB Mann Judd Insolvency WA. Benjamin assists the Partners with the many Corporate and Personal insolvency appointments managed by the HLB Insolvency team.

If you have any queries about insolvency matters, please feel free to contact the team on 08 9215 7900.


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