Bankruptcy in Australia - Will my income be influenced if I go bankrupt?

Bankruptcy Australia is a intricate process, and you should ensure you get the right suggestions. And when it comes to your income being affected, the answer to the question is maybe. The first thing you need to know about going bankrupt is there is no rule on how much you can earn. However, I will point out that your income is a considerable consideration when working through when it comes to Bankruptcy.

The very first thing you need to understand about this area of Bankruptcy is just how much you can earn before you start paying back money to your creditors via your trustee (see table below).

Net income is the pre-tax/ in the hand amount of money you earn each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can request a hardship variation that increases the threshold amount, if you have financial strains in Australia such as medical, child care, considerable travel to and from work, or a situation where your spouse used to work but is no longer able to add to the household income.

Some of the informative parts of Bankruptcy is that your employer will not be informed when you file for bankruptcy. Also, Child support is always looked at in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you pay $5,000 child support each year and you have no dependents living with you then your modified net income limit will be $55,332.10.

There are more issues covering income and what is or isn't thought of as income - if you're unsure, it's a good idea to get specialist advice. The reason you should consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically viable option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will be taken by the ATO whilst you are bankrupt to add toward your tax bill. If you don't have a tax bill then you will keep your tax refund provided that doesn't take you over your threshold income limitations.

If you think when it comes to Bankruptcy, your issue is more complicated, then just get professional advice in Australia. I may seem like a broken record, but bear in mind that it's always a smart idea to overcome these options prior to declaring bankruptcy, since once you have filed the paperwork it's far too late to change your mind.

If you intend to learn more about what to do, where to turn and what problems to ask about Bankruptcy, then don't hesitate to contact Liquidation Service on 1300 795 575, or go to our website: liquidationservice.com.au.com.au.

Bankruptcy in Australia - Choices, Choice, Choices

When it comes down to Bankruptcy Australia, there are a number of options that we get given depending upon who we are, who we talk to, and just what has gone wrong. The most common trouble I see with Bankruptcy is when it comes to choosing between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Australia, most of the information and facts you receive on this subject matter will reflect the interests of the advice giver. That is why, if you call a debt consolidation company, I can assure you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for aiding you wrap each one of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but these people aren't going to be doing it for free. Please don't misunderstand me: if you feel your financial troubles in Australia may be fixed by paying less interest, then go ahead and check out the choices. Even a tiny amount of interest saved over years quickly adds up.

Typically I find if you read this blog you've most likely attempted to consolidate your debts already and come to the following realisations like these:

• Your credit rating is not good, and your credit file definitely has nonpayments on it so no one will offer you a loan, consolidated or otherwise,.

• By the time you work it all out, you're so far down a hole that saving a small amount of interest simply won't make a lot of difference

• You've undoubtedly arrived at the stage where you've had enough, you're emotionally burnt out, you can't go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

So when it relates to Bankruptcy in Australia, what's the difference between a Debt Agreement and a Personal Insolvency Agreement?

Adaptability is the main thing Personal Insolvency Agreements (PIA) have in their favour. They're also administered by a registered and - might I add - regulated trustee featuring the government trustee ITSA, and not a private agency that advertises on TV. Basically this process resembles Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these experts negotiate a deal in your place. You can offer a lump sum settlement figure or take part in a payment plan, or you can offer them assets instead of cash. This can sound okay when it comes to the complications with Bankruptcy-- that is up until you discover that one of the challenges with PIA's is that 75 % of the people you owe money to will have to come to an understanding the deal. If they don't, your proposal is denied or has to be renegotiated.

Generally people you owe money want all their money back plus interest. Sometimes they'll settle for under the amount you owe them - it's typically a percentage of the debt-- but allow me to stress this aspect: because of all the variables involved in the negotiation process to put together a PIA its difficult to put a figure on what the people you owe money to will actually settle for.

Most of the time you'll have to pay back 100 % of the debt owed. This is not because your creditors are greedy or have a mean streak, it's because the administrators take 20 % of whatever is agreed upon with the people you owe money to. That applies whether you use a private company for this process or ITSA, the government body setup to administer to these PIAs.

When it comes to Bankruptcy and insolvency I've come across creditors settling for less 80 % on rare occasions, but that usually only occurs with a public company going into receivership owing huge sums of money (the kind that makes the news). If you are were owed $10million and you know the people who owe you the money have a team of shrewd lawyers and some very clever structures in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Australia aren't going to get that lucky!

If you want to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Liquidation Service on 1300 795 575, or visit our website: liquidationservice.com.au.com.au.