Bankruptcy in Sydney - Will my income be altered if I go bankrupt?

Bankruptcy Sydney is a challenging 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 very first thing you have to know about going bankrupt is there is no limitation on how much you can earn. However, I will say that your income is a considerable consideration when working through when it comes to Bankruptcy.

The first thing you need to understand 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 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 increases the threshold amount, if you have costs in Sydney such as medical, child care, significant 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 useful parts of Bankruptcy is that your employer will not be alerted 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 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 many more issues surrounding income and what is or isn't regarded as income - if you're not exactly sure, it's a good idea to get professional 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 may be taken by the ATO while you are bankrupt to chip in 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 feel like when it comes to Bankruptcy, your issue is more complex, then please get specialist advice in Sydney. I may sound like a broken record, but remember that it's always a smart idea to work through these options before declaring bankruptcy, since 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, then don't hesitate to contact Bankruptcy Advice Sydney on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Sydney .

Bankruptcy in Sydney - Choices, Choice, Choices

When it comes to Bankruptcy Sydney, there are a great deal of choices that we get given depending on who we are, who we approach, and what exactly has happened. The most common confusion 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 Sydney, most of the information you receive on this topic will reflect the interests of the advice giver. Therefore, if you call a debt consolidation company, I can guarantee you they will tell you to consolidate your debts. The debt consolidation business is a multi-billion dollar industry making money in one very basic way: charging you a fee for aiding you wrap each of your credit card and personal loans into one neat and tidy bundle.

I hate to tell you this but these guys aren't doing it free of charge. Please do not misunderstand me: if you think your financial issues in Sydney might be solved by paying less interest, then go on and investigate the choices. Even a tiny amount of interest saved over years quickly adds up.

Typically I find if you read this blog you've undoubtedly tried 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 defaults on it so no one will give you a loan, consolidated or otherwise,.

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

• You've most probably reached the stage where you've had enough, you're emotionally fatigued, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail etc.

Personal Insolvency Agreements

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

Freedom 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 including the government trustee ITSA, and not a private agency that advertises on TV. Ultimately this method resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they negotiate a deal on your behalf. You can give a lump sum settlement figure or enter into a payment plan, or perhaps you can offer them assets as an alternative to cash. This can sound okay when it comes to the complications with Bankruptcy - that is up until you realise that one of the problems 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 rejected or must be renegotiated.

Generally people you owe money want all their money back and also interest. Sometimes they'll opt for less than the amount you owe them - it's generally a percentage of the debt - but let me 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 truly settle for.

In many 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 Bankruptcy and insolvency I've come across creditors choosing less 80 % on rare occasions, but that usually only occurs with a public company entering 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 clever 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 Sydney aren't going to get that lucky!

If you wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to call Bankruptcy Advice Sydney on 1300 879 867, or visit our website: bankruptcy-advice.com.au/Sydney .