Bankruptcy Advice in Hervey Bay – Will my income be altered if I go bankrupt?

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Bankruptcy Advice Hervey Bay is a intricate process, and you ought 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 regulation on how much you can earn. However, I will point out that your income is a major 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 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 amount of money 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 make an application for a hardship variation that increases the threshold amount, if you have expenses in Hervey Bay like 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 household income.

Some of the interesting parts of Bankruptcy Advice 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 a lot more issues involving income and what is or isn’t regarded as income – if you’re not exactly sure, it’s best to get skilled advice. The reason you should 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 may be taken by the ATO while you are bankrupt to add 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 restrictions.

If you feel like when it comes to Bankruptcy Advice, your case is more intricate, then simply get expert advice in Hervey Bay. I may seem like a broken record, but bear in mind that it’s always a good idea to overcome these options before declaring bankruptcy, because once you have filed the paperwork it’s far too late to change your mind.

If you wish to find out more about what to do, where to turn and what questions to ask about Bankruptcy Advice, then feel free to contact Bankruptcy Experts Hervey Bay on 1300 795 575, or explore our website: bankruptcyexpertsHerveyBay.com.au.

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Going Bankrupt in Hervey Bay – Choices, Choice, Choices

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When it comes to Going Bankrupt in Hervey Bay, there are a load of choices that we get given depending on who we are, who we approach, and what exactly has happened. Among 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 Hervey Bay, a lot of the information you receive on this issue will reflect the interests of the advice giver. That is why, if you call a debt consolidation firm, I can assure you they will tell you to consolidate your debts. The debt consolidation industry is a multi-billion dollar industry making money in one very straightforward way: charging you a fee for aiding you wrap all of your credit card and personal loans into just one neat and tidy package.

I hate to tell you this but they aren’t going to be doing it free of charge. Please do not misunderstand me: if you believe your financial troubles in Hervey Bay can be fixed by paying less interest, then go ahead and look into the possibilities. Even a tiny amount of interest saved over years quickly adds up.

Usually I find if you read this blog you’ve undoubtedly attempted 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 not a single person 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 undoubtedly 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 and so forth.

Personal Insolvency Agreements

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

Adaptability is the main thing Personal Insolvency Agreements (PIA) have in their favour. They’re also administered by a registered and – might I add – regulated trustee including the government trustee ITSA, and not a private company that advertises on TV. Basically this method is similar to Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these experts work out a deal on your behalf. You can offer 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 acceptable when it comes to the issues with Going Bankrupt – that is up until you discover that one of the difficulties with PIA’s is that 75 % of the people you owe money to will need to agree on the deal. If they do not, your proposal is denied or will need to be renegotiated.

Generally people you owe money want all their money back plus interest. Sometimes they’ll go for under the amount you owe them – it’s generally 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 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 Going Bankrupt and insolvency I’ve heard of creditors choosing 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 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 Hervey Bay 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 Advice Hervey Bay on 1300 879 867, or visit our website:bankruptcyexpertsherveybay.com.au.