Bankruptcy in Hobart - Will my income be affected if I go bankrupt?

Bankruptcy Hobart is a confusing process, and you need to ensure you get the right advice. And when it comes to your income being affected, the answer to the question is maybe. The very first thing you have 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 serious consideration when working through when it comes to Bankruptcy.

The 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 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 financial commitments in Hobart such as medical, child care, sizable travel to and from work, or a situation where your partner used to work but is not able to contribute to the family income.

Some of the informative parts of Bankruptcy is that your employer will not be informed 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 considered, for example if you give $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 many more issues involving income and what is or isn't considered income - if you're not sure, it's best 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 instances not an economically sensible 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 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 caps.

If you believe that when it comes to Bankruptcy, your case is more intricate, then simply get expert advice in Hobart. I may sound 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 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 Hobart on 1300 795 575, or explore our website: bankruptcyexpertsHobart.com.au.

Bankruptcy in Hobart - Choices, Choice, Choices

When it comes to Bankruptcy Hobart, there are a ton of options that we get given depending on who we are, who we talk to, and exactly what has happened. One of 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 Hobart, most of the related information you receive on this subject will reflect the interests of the advice giver. Therefore, if you call a debt consolidation provider, I can guarantee 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 just one neat and tidy package.

I hate to tell you this but these people aren't doing it free of charge. Please don't misunderstand me: if you think your financial problems in Hobart can be fixed by paying less interest, then go on and explore the choices. Even a small amount of interest saved over years easily adds up.

Normally I find if you read this blog you've undoubtedly attempted to consolidate your debts already and come to the following realisations similar to these:

• Your credit rating is no good, and your credit file already has nonpayments on it so no one will offer 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 tiny bit of interest simply won't make a great deal of difference,.

• You've very likely reached the point where you've had more than enough, you're emotionally burnt out, you can't go on yet another day ignoring blocked calls on your phone, ignoring the demands in the mail and so forth.

Personal Insolvency Agreements

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

Adaptability 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 agency that advertises on TV. Essentially this process resembles Debt Agreements (DA): The trustee has a meeting with the people you owe money to and they work out a deal on your behalf. You can offer a lump sum settlement figure or enter into a payment plan, or perhaps you can offer them assets as an alternative to cash. This might sound alright when it comes to the complications with Bankruptcy - that is until you realise that one of the difficulties with PIA's is that 75 % of the people you owe money to need to come to an understanding the deal. If they don't, your plan is denied or will need to be renegotiated.

Generally the people you owe money really want all their money back in addition to interest. Sometimes they'll go for less than 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 really settle for.

In most cases 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 heard of 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 clever lawyers and some very clever frameworks in place and they offer 5 % of the debt, you might take it and be grateful. Sadly, ordinary punters like you and me in Hobart 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 Bankruptcy, then feel free to get in touch with Bankruptcy Experts Hobart on 1300 795 575, or visit our website:bankruptcyexpertsHobart.com.au.