Finance companies and other lenders often secure their loans with a consumer mortgage or bill of sale (see consumer credit) over a person's goods. If the payments are in arrears when a person goes bankrupt, the credit provider can seize and sell the goods. Any money still owing to the creditor after the sale is added to the bankrupt's list of debts. Where the mortgage or bill of sale is taken over goods which are exempt under the Bankruptcy Act 1966 (Cth) (such as household furniture or a motor vehicle worth less than $6000), the exemption only stops the trustee from selling or dealing with the goods. They can still be taken by a creditor with a bill of sale or a consumer mortgage if payments are behind. This seems particularly unfair since, although the Act specifically protects the goods, a bill of sale or consumer mortgage overrides that protection. However, the goods cannot be taken by the creditor and sold simply because the debtor enters bankruptcy.

Where a consumer mortgage or bill of sale is taken over goods which are not exempt the bankrupt can keep the goods as long as the payments are made on time. If the credit provider agrees the trustee can take and sell the goods, repay the amount owing under the consumer mortgage or bill of sale and keep the balance to pay the creditors. A trustee is only likely to do this if the goods are worth more than the amount still owing. Also when the goods are finally paid for they can be seized by he trustee and sold [s 58(1)].