Bankruptcy in Australia - Will my income be changed if I go bankrupt?

Bankruptcy Australia is a challenging process, and you should ensure you get the right advice. 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 regulation on how much you can earn. However, I will mention that your income is a serious 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 raises the threshold amount, if you have financial commitments in Australia like medical, child care, significant travel to and from work, or a circumstance where your spouse used to work but is no longer able to add to the family income.

Some of the useful parts of Bankruptcy is that your employer will not be notified when you file for bankruptcy. Also, Child support is always considered in bankruptcy, if you receive child support that is not factored in as income. If you pay child support this will be also considered, for example if you provide $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 more issues involving income and what is or isn't thought of as income - if you're not exactly sure, it's best 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 viable 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 so long as that doesn't take you over your threshold income restrictions.

If you believe that when it comes to Bankruptcy, your case is more complicated, then feel free to get professional advice in Australia. I may seem like a broken record, but keep in mind that it's always a smart idea to overcome these options prior to declaring bankruptcy, because once you have filed the paperwork it's too late to change your mind.

If you want to find out more about what to do, where to turn and what problems to ask about Bankruptcy, then feel free to contact Bankruptcy Australia on 1300 795 575, or check out our website: bankruptcy-australia.net.au