Bankruptcy Advice in Melbourne – Will my income be influenced if I go bankrupt?

income change.jpg

Bankruptcy Advice Melbourne is a confusing process, and you need to ensure you get the right guidance. 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 constraint on how much you can earn. However, I will mention that your income is a significant consideration when working through when it comes to Bankruptcy Advice.

The very first thing you need to understand about this area of Bankruptcy Advice is 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 each year. A dependant is someone who lives with you and earns less than $3,124 per year (regardless of their age).

You can make an application for a hardship variation that raises the threshold amount, if you have financial commitments in Melbourne like medical, child care, serious travel to and from work, or a situation where your partner used to work but is no longer able to support the household income.

Some of the informative parts of Bankruptcy Advice is that your employer will not be notified when you file for bankruptcy. Also, Child support is always taken into account 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 revised net income limit will be $55,332.10.

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

If one of your creditors is the ATO (for unpaid taxes), then your tax refund will likely be taken by the ATO while you are bankrupt to contribute 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 Advice, your situation is more intricate, then please get expert advice in Melbourne. I may seem like a broken record, but remember that it’s always a good idea to work through these options before declaring bankruptcy, because once you have filed the paperwork it’s too late to change your mind.

If you want to learn more about what to do, where to turn and what issues to ask about Bankruptcy Advice, then don’t hesitate to contact Bankruptcy Experts Melbourne on 1300 795 575, or visit our website:bankruptcyMelbourne.com.

Advertisements

Going Bankrupt in Melbourne – Choices, Choice, Choices

Bankruptcy Choice.jpgWhen it comes down to Going Bankrupt in Melbourne, there are a great deal of choices that we get given depending upon who we are, who we speak with, and just what has gone wrong. The most common confusion I see with Going Bankrupt is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Going Bankrupt in Melbourne, a lot of the facts you receive on this issue will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can promise you they will tell you to consolidate your debts. The debt consolidation operation is a multi-billion dollar industry making money in one very basic way: charging you a fee for helping you wrap every one of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but they aren’t going to be doing it for free. Please do not misunderstand me: if you consider your financial troubles in Melbourne may possibly be fixed by paying less interest, then go on and explore the options. Even a little amount of interest saved over years quickly adds up.

Normally I find if you are reading this blog you’ve probably attempted to consolidate your debts already and come to the following realisations similar to these:

  • Your credit rating is no good, and your credit file already has defaults on it so not a single person will offer you a loan, consolidated or otherwise,.
  • By the time you work all of it out, you’re so far down a hole that saving on a little bit of interest just won’t make a great deal of difference,.
  • You’ve quite possibly reached the point where you’ve had more than enough, you’re mentally worn down, you can’t go on one more day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

So when it comes to Going Bankrupt in Melbourne, what’s the big difference between a Debt Agreement and a Personal Insolvency Agreement?

Adaptability is the main point Personal Insolvency Agreements (PIA) have in their favour. They’re also administered by a registered and – may I add – regulated trustee featuring the government trustee ITSA, and not a private firm that advertises on TV. Ultimately this process is similar to Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and they mediate a deal on your behalf. You can offer a lump sum settlement figure or enter into a payment plan, or you can offer them assets as an alternative to cash. This can sound acceptable when it comes to the issues with Going Bankrupt – that is until you realise that one of the obstacles with PIA’s is that 75 % of the people you owe money to must come to an understanding the deal. If they don’t, your proposal is rejected or will have to be renegotiated.

Generally people you owe money want all their money back plus interest. Sometimes they’ll settle for less than the amount you owe them – it’s normally a percentage of the debt – but allow me to stress this part: 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 truly settle for.

In most cases you’ll have to pay back 100 % of the debt owed. This is not just because your creditors are greedy or have a mean streak, it’s because the administrators take 20 % of whatever is decideded 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 Going Bankrupt and insolvency I’ve heard of creditors opting 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 wise lawyers and some very clever frameworks in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Melbourne 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 Going Bankrupt, then feel free to get in touch with Bankruptcy Experts Melbourne on 1300 795 575, or visit our website: bankruptcyMelbourne.com.au