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

Bankruptcy Melbourne is a complex process, and you need to make sure you get the right recommendations. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you need to know about going bankrupt is there is no restriction on how much you can earn. However, I will mention that your income is a major consideration when working through when it comes to Bankruptcy.

The first thing you need to learn 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 amount 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 request a hardship variation that increases the threshold amount, if you have financial commitments in Melbourne such as medical, child care, significant travel to and from your job, or a situation where your partner used to work but is not able to support the family income.

Some of the interesting parts of Bankruptcy is that your employer will not be notified 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 altered net income limit will be $55,332.10.

There are many more issues covering income and what is or isn't considered income - if you're unsure, it's ideal to get qualified advice. The reason you must consider your income as a part of the Big 5 questions here is that bankruptcy is in some instances not an economically sensible 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 chip in 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 limitations.

If you think when it comes to Bankruptcy, your case is more complex, then please get professional 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, due to the fact that once you have filed the paperwork it's too late to change your mind.

If you would like to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Fresh Start Solutions Melbourne on 1300 818 575, or go to our website: freshstartsolutions.com.au/bankruptcy-Melbourne

Bankruptcy in Melbourne - Choices, Choice, Choices

 When it comes to Bankruptcy Melbourne, there are a bunch of options that we get given depending upon who we are, who we talk to, and just what has happened. One of 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 Melbourne, most of the facts you receive on this subject matter will reflect the interests of the advice giver. That is why, if you call a debt consolidation company, 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 basic way: charging you a fee for helping you wrap every one of your credit card and personal loans into one neat and tidy package.

I hate to tell you this but these people won't be doing it for free. Please do not misunderstand me: if you feel your financial troubles in Melbourne could be solved by paying less interest, then go on and check out the possibilities. Even a tiny amount of interest saved over years quickly adds up.

Usually I find if you read this blog you've probably tried to consolidate your debts already and come to the following realisations similar to 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 all of it out, you're so far down a hole that saving a little bit of interest just won't make a great deal of difference,.

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

Personal Insolvency Agreements

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

Flexibility 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 organization that advertises on TV. Ultimately this method resembles Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these guys work out a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or maybe you can offer them assets as an alternative to cash. This may sound okay when it comes to the issues with Bankruptcy - 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 do not, your plan is rejected or ought to be renegotiated.

Generally people you owe money want all their money back plus interest. Sometimes they'll go for beneath the amount you owe them - it's typically 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 really settle for.

In most cases you'll have to pay back 100 % of the debt owed. This is not 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 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 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 Melbourne 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 call Fresh Start Solutions Melbourne on 1300 818 575, or visit our website: freshstartsolutions.com.au/bankruptcy-Melbourne