Bankrupt, Declaring Bankruptcy, Bankruptcy
March 3, 20170

Will my income be changed if I go bankrupt?

Posted by:Charles Bosse onMarch 3, 2017

Bankruptcy in Australia is a complicated process, and you need to make sure you get the right insight. And when it comes to your income being affected, the answer to the question is maybe. The first thing you have to know about going bankrupt is there is no limitation on how much you can earn. However, I will mention that your income is a serious consideration when working through when it comes to Bankruptcy.

The very first thing you need to keep in mind about this area of Bankruptcy is the amount 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 sum you earn per year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

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

Some of the intriguing 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 thought about, for example if you give $5,000 child support each year and you have no dependents living with you then your changed net income limit will be $55,332.10.

There are many more issues covering income and what is or isn’t regarded as income – if you’re not sure, it’s best to get qualified advice. The reason you have to consider your income as a part of the Big 5 questions here is that bankruptcy is in some situations not an economically sensible option.

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

If you believe that when it comes to Bankruptcy, your situation is more intricate, then please get professional advice in Australia. I may sound like a broken record, but bear in mind that it’s always a good idea to work through 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 issues to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Australia on 1300 818 575,we have offices in, Brisbane, Canberra, Sunshine Coast, Sydney, Melbourne, Gold Coast, Adelaide, Perth, Darwin and Hobart. or visit our website: www.freshstartsolutions.com.au/bankruptcy-Australia

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