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

Bankruptcy 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.

The very first thing you need to understand about this area of Bankruptcy 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 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, 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, then don't hesitate to contact Bankruptcy Experts Melbourne on 1300 795 575, or visit our website: bankruptcyexpertsMelbourne.com.au.

Bankruptcy in Melbourne - Choices, Choice, Choices

When it comes down to Bankruptcy Melbourne, there are a load of choices that we get given depending upon who we are, who we approach, and what exactly has gone wrong. 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 Melbourne, most of the facts you receive on this subject matter will reflect the interests of the advice giver. Therefore, if you call a debt consolidation provider, I can promise you they will tell you to consolidate your debts. The debt consolidation business is a multi-billion dollar industry making money in one very simple way: charging you a fee for aiding you wrap each one of your credit card and personal loans into one neat and tidy bundle.

I hate to tell you this but these guys aren't going to be doing it for free. Please do not misunderstand me: if you consider your financial issues in Melbourne might be fixed by paying less interest, then go on and explore the possibilities. Even a tiny amount of interest saved over years quickly adds up.

More often than not I find if you are reading this blog you've most likely attempted to consolidate your debts already and come to the following realisations like these:

• Your credit rating is no good, and your credit file definitely has nonpayments on it so not a single person 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 arrived at the point 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 Melbourne, 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 - might I add - regulated trustee featuring the government trustee ITSA, and not a private organization that advertises on TV. Basically this method resembles 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 give a lump sum settlement figure or enter into a payment plan, or maybe you can offer them assets as an alternative to cash. This can sound fine when it comes to the issues with Bankruptcy - that is until you realize that one of the problems with PIA's is that 75 % of the people you owe money to have to agree on the deal. If they don't, your proposal is denied or needs to be renegotiated.

Generally the people you owe money prefer all their money back in addition to interest. Sometimes they'll settle for beneath the amount you owe them - it's generally a percentage of the debt - but allow me to 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.

In many 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 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 wise 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 would like to learn more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Melbourne on 1300 795 575, or visit our website:bankruptcyexpertsMelbourne.com.au.