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

Bankruptcy Adelaide is a complicated process, and you have to be sure 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 need to know about going bankrupt is there is no rule on how much you can earn. However, I will say that your income is a major consideration when working through when it comes to Bankruptcy.

The very first thing you need to learn 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 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 Adelaide like medical, child care, substantial travel to and from work, or a situation where your spouse used to work but is not able to add to the household income.

Some of the insightful parts of Bankruptcy is that your employer will not be told 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 provide $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 more issues surrounding income and what is or isn't considered income - if you're not sure, it's best to get specialist advice. The reason you need to consider your income as a part of the Big 5 questions here is that bankruptcy is in some cases not an economically practical option.

If one of your creditors is the ATO (for unpaid taxes), then your tax refund can 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 provided that doesn't take you over your threshold income limits.

If you believe that when it comes to Bankruptcy, your situation is more challenging, then please get professional advice in Adelaide. 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 wish to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Adelaide on 1300 818 575, or explore our website:freshstartsolutions.com.au/bankruptcy-Adelaide

Bankruptcy in Adelaide - Choices, Choice, Choices

When it comes to Bankruptcy Adelaide, there are a great deal of choices that we get given depending upon who we are, who we talk with, and just what has happened. Among the most common confusion I see with Bankruptcy is when it comes to selecting between Debt Consolidation, Personal Insolvency Agreements, and Bankruptcy itself.

Should I consolidate my debts?

When it comes to Bankruptcy in Adelaide, much of the information and facts you receive on this topic will reflect the interests of the advice giver. Therefore, if you call a debt consolidation firm, I can assure you they will tell you to consolidate your debts. The debt consolidation operation is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for helping you wrap every one of your credit card and personal loans into just one neat and tidy package.

I hate to tell you this but these guys aren't going to be doing it free of charge. Please don't misunderstand me: if you think your financial troubles in Adelaide may be solved by paying less interest, then go ahead and consider the choices. Even a little amount of interest saved over years easily adds up.

Generally I find if you are reading this blog you've most likely tried to consolidate your debts already and come to the following realisations such as these:

• Your credit rating is no good, and your credit file already has defaults on it so nobody will give 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 bit of interest simply won't make a great deal of difference,.

• You've most probably reached the point where you've had enough, you're mentally fatigued, 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 concerns Bankruptcy in Adelaide, what's the huge difference between a Debt Agreement and a Personal Insolvency Agreement?

Flexibility is the main thing 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 agency that advertises on TV. Essentially this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these guys mediate 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 instead of cash. This can sound okay when it comes to the problems with Bankruptcy - that is until you realize that one of the challenges with PIA's is that 75 % of the people you owe money to must agree on the deal. If they do not, your proposal is denied or will need to be renegotiated.

Generally the people you owe money want all their money back as well as interest. Sometimes they'll go for under 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 in fact settle for.

Most of the time 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 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 going 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 brilliant 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 Adelaide aren't going to get that lucky!

If you want to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Fresh Start Solutions Adelaide on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Adelaide