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

Bankruptcy Newcastle is a confusing process, and you should ensure you get the right guidance. 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 rule on how much you can earn. However, I will mention that your income is a considerable consideration when working through when it comes to Bankruptcy.

The first thing you need to know 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 portion 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 get a hardship variation that raises the threshold amount, if you have costs in Newcastle such as medical, child care, considerable travel to and from your job, or a situation where your partner used to work but is no longer able to contribute to 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 altered net income limit will be $55,332.10.

There are much more issues surrounding income and what is or isn't considered income - if you're not exactly sure, it's a good idea to get specialist advice. The reason you must 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 whilst you are bankrupt to contribute 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 limitations.

If you believe that when it comes to Bankruptcy, your circumstance is more challenging, then just get specialist advice in Newcastle. I may seem like a broken record, but bear in mind that it's always a smart idea to work through these options before declaring bankruptcy, due to the fact that 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 Experts Newcastle on 1300 795 575, or go to our website:bankruptcyexpertsNewcastle.com.au.

Bankruptcy in Newcastle - Choices, Choice, Choices

When it comes to Bankruptcy Newcastle, there are a ton of choices that we get given depending upon who we are, who we speak with, and what exactly 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 Newcastle, most of the information you receive on this subject will reflect the interests of the advice giver. Therefore, if you call a debt consolidation company, I can guarantee 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 helping you wrap most of your credit card and personal loans into a single neat and tidy package.

I hate to tell you this but these people won't be doing it free of charge. Please do not misunderstand me: if you think your financial issues in Newcastle can be fixed by paying less interest, then go ahead and check out the options. Even a tiny amount of interest saved over years quickly adds up.

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

- Your credit rating is not 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 tiny bit of interest simply won't make a lot of difference,.

- You've very likely gotten to the stage where you've had enough, you're emotionally worn down, 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 down to Bankruptcy in Newcastle, 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 - may I add - regulated trustee featuring the government trustee ITSA, and not a private company that advertises on TV. Basically this process is similar to Debt Agreements (DA): The trustee holds a meeting with the people you owe money to and these guys mediate a deal in your place. You can give a lump sum settlement figure or take part in a payment plan, or perhaps you can offer them assets rather than cash. This might sound fine when it comes to the problems with Bankruptcy - that is until you realise that one of the challenges with PIA's is that 75 % of the people you owe money to will have to agree on the deal. If they don't, your proposal is denied or ought to be renegotiated.

Generally people you owe money prefer all their money back plus interest. Sometimes they'll go for beneath 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 actually settle for.

In most 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 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 come across 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 wise 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 Newcastle aren't going to get that lucky!

If you would like to find out more about what to do, where to turn and what questions to ask about Bankruptcy, then feel free to contact Bankruptcy Experts Newcastle on 1300 795 575, or visit our website: bankruptcyexpertsNewcastle.com.au.