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

Bankruptcy Hobart is a confusing process, and you should ensure 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 have to know about going bankrupt is there is no restriction on how much you can earn. However, I will point out that your income is a significant consideration when working through when it comes to Bankruptcy.

The very 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 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 apply for a hardship variation that increases the threshold amount, if you have financial commitments in Hobart like medical, child care, significant 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 insightful parts of Bankruptcy is that your employer will not be notified when you file for bankruptcy. Also, Child support is always looked at 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 much more issues encompassing income and what is or isn't thought of as income - if you're not sure, it's ideal 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 situations not an economically sensible 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 just as long as that doesn't take you over your threshold income caps.

If you think when it comes to Bankruptcy, your situation is more intricate, then simply get experienced advice in Hobart. I may seem like a broken record, but bear in mind that it's always a great idea to work through these options prior to declaring bankruptcy, due to the fact that once you have filed the paperwork it's far too late to change your mind.

If you wish to learn more about what to do, where to turn and what issues to ask about Bankruptcy, then don't hesitate to contact Fresh Start Solutions Hobart on 1300 818 575, or go to our website: freshstartsolutions.com.au/bankruptcy-Hobart

Bankruptcy in Hobart - Choices, Choice, Choices

When it comes to Bankruptcy Hobart, there are a number of choices that we get given depending upon who we are, who we talk to, and just what has gone wrong. One of 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 Hobart, a lot of the info you receive on this topic will reflect the interests of the advice giver. That is why, if you call a debt consolidation firm, I can promise you they will tell you to consolidate your debts. The debt consolidation business is a multi-billion dollar industry making money in one very basic way: charging you a fee for assisting you wrap every one of your credit card and personal loans into a single neat and tidy bundle.

I hate to tell you this but these guys aren't going to be doing it for free. Please don't misunderstand me: if you feel your financial issues in Hobart might be solved by paying less interest, then go on and look into the options. Even a little amount of interest saved over years easily adds up.

Typically 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 not good, and your credit file already has defaults on it so no one 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 great deal of difference,.

• You've quite possibly arrived at the point where you've had more than 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 and so on.

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 company that advertises on TV. Ultimately this method is similar to Debt Agreements (DA): The trustee has a meeting with the people you owe money to and these experts negotiate a deal in your place. You can give a lump sum settlement figure or enter into a payment plan, or you can offer them assets as an alternative to cash. This can sound okay when it comes to the complications with Bankruptcy - that is up until you realise that one of the obstacles 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 proposal is rejected or ought to be renegotiated.

Generally the people you owe money want all their money back as well as interest. Sometimes they'll opt for beneath the amount you owe them - it's normally 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.

In many 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 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 settling for 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 brilliant 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 Hobart 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 Fresh Start Solutions Hobart on 1300 818 575, or visit our website:freshstartsolutions.com.au/bankruptcy-Hobart