Bankruptcy in Cairns - Will my income be altered if I go bankrupt?

Bankruptcy Cairns is a intricate process, and you need to ensure you get the right insight. 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 point out that your income is a major consideration when working through when it comes to Bankruptcy.

The first thing you need to understand about this area of Bankruptcy 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 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 request a hardship variation that increases the threshold amount, if you have costs in Cairns such as medical, child care, significant travel to and from work, or a circumstance where your partner used to work but is no longer able to add to the family income.

Some of the insightful parts of Bankruptcy is that your employer will not be informed 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 considered, for example if you pay $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 encompassing income and what is or isn't considered income - if you're not exactly sure, it's ideal 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 practical 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 provided that doesn't take you over your threshold income caps.

If you think when it comes to Bankruptcy, your situation is more complicated, then feel free to get professional advice in Cairns. I may seem like a broken record, but bear in mind that it's always a great idea to overcome these options before declaring bankruptcy, since 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 Bankruptcy Experts Cairns on 1300 795 575, or explore our website: bankruptcyexpertsCairns.com.au.

Bankruptcy in Cairns - Choices, Choice, Choices

When it comes down to Bankruptcy Cairns, there are a ton of choices that we get given depending on who we are, who we approach, and just what has happened. Among the most common trouble 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 Cairns, most 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 company, 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 of your credit card and personal loans into one neat and tidy bundle.

I hate to tell you this but they aren't going to be doing it for free. Please don't misunderstand me: if you believe your financial troubles in Cairns may be solved by paying less interest, then go on and look into the options. Even a little amount of interest saved over years quickly adds up.

Generally I find if you are reading this blog you've probably 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 definitely has nonpayments on it so not a single person will offer 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 lot of difference,.

• You've most probably gotten to the stage where you've had more than enough, you're mentally drained, you can't go on another day ignoring blocked calls on your phone, ignoring the demands in the mail and so on.

Personal Insolvency Agreements

So when it relates to Bankruptcy in Cairns, what's the big difference between a Debt Agreement and a Personal Insolvency Agreement?

Overall flexibility is the main thing 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. Essentially this method resembles Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these guys arrange a deal on your behalf. You can give a lump sum settlement figure or enter into a payment plan, or you can offer them assets rather than cash. This might sound okay when it comes to the problems with Bankruptcy - that is up until you realise that one of the challenges with PIA's is that 75 % of the people you owe money to will need to agree on the deal. If they don't, your plan is rejected or needs to be renegotiated.

Generally people you owe money prefer all their money back in addition to interest. Sometimes they'll go for less than the amount you owe them - it's typically a percentage of the debt - but let me 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 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 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 smart 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 Cairns 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 get in touch with Bankruptcy Experts Cairns on 1300 795 575, or visit our website:bankruptcyexpertsCairns.com.au.