Will my income be changed if I go bankrupt?
Bankruptcy in Australia – Will my income be changed if I go bankrupt?
Bankruptcy in Australia is a complicated process, and you should be sure you get the right insight. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you have to know about going bankrupt is there is no constraint on how much you can earn. However, I will say that your income is a serious 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 quantity you earn annually. 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 raises the threshold amount, if you have financial commitments in Australia like medical, child care, significant travel to and from your job, or a circumstance where your partner used to work but is not able to support the family income.
Some of the useful parts of Bankruptcy is that your employer will not be told when you file for bankruptcy. Also, Child support is always taken into consideration 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 pay $5,000 child support each year and you have no dependents living with you then your revised net income limit will be $55,332.10.
There are much more issues covering income and what is or isn’t thought of as income – if you’re unsure, it’s recommended to get experienced advice. The reason you will need 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 can be taken by the ATO whilst you are bankrupt to contribute 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 restrictions.
If you believe that when it comes to Bankruptcy, your circumstance is more complicated, then feel free to get qualified advice in Australia. I may sound like a broken record, but bear in mind that it’s always a smart idea to overcome these options before declaring bankruptcy, because once you have filed the paperwork it’s far too late to change your mind.
If you intend to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then don’t hesitate to contact Bankruptcy Experts Australia on 1300 795 575, we have offices in, Brisbane, Canberra, Sunshine Coast, Sydney, Melbourne, Gold Coast, Adelaide, Perth, Darwin and Hobart. or visit our website: www.bankruptcyexperts.com.au