Bankruptcy

Bankruptcy is not the end of your business or professional life, it is the end of unsustainable debt. At Taylor Insolvency we will work with you where we can to keep your family home within your family and with you to ensure that the Bankruptcy process is a healing process for you and your creditors and not a combative one.

If you want to have a chat about other options instead of Bankruptcy like a Personal Insolvency Agreement please gives us a ring for a confidential free discussion and quote.

See if you Qualify for Bankruptcy

Bankruptcy and Household Items

The Bankruptcy Act and Regulations specifically provide that certain household items are protected property and can not be sold by your Bankruptcy Trustee.

In an actual fact after looking at the cost of picking up and selling your household items and keeping in mind what we are not legally allowed to take, almost all Bankrupt’s retain all their household property.

The household property that may be at risk are as follows:-
- Expensive art
- Expensive jeweellery
- Gold
- Antiques

Bankruptcy and Your Income

You can earn as much income as you are able to during Bankruptcy. Anybody who has told you that you are capped in what you can earn is incorrect.

The only restriction on your income during Bankruptcy is above the income threshold you have to contribute 50% of your net income back to your creditors. This income test is for the three years of your bankruptcy. Any amount earned below the income threshold you can keep. Your threshold is determined by how many dependents you have (i.e. children or people dependent upon your income).

The current net income (i.e. after tax) thresh holds are as follows:-

Dependents
Net Threshold
0
56,674.80
1
66,876.26
2
71,977.00
3
74,810.74
4
75,944.23
Over 4
77,077.73


If you are considering your overall salary, a salary of $80,000 is approximately including super only about $200 over the threshold and therefor only liable to pay $100 per year.

Things that can decrease your payments are:-
- Child support payments
- Application for Hardship

Things that can increase your payments.
- Certain allowances
- Vehicle provided by work
- Bonus and or any other income

Bankruptcy and Overseas Travel

One of the biggest myths in Bankruptcy is that you can not travel overseas. This is not true. To travel overseas you must simply obtain the consent of your Bankruptcy Trustee.

To obtain the consent of your Bankruptcy Trustee, please see the Travel request form link here.

We consider travel requests at no cost to you the bankrupt.

We endeavour to respond to travel requests within 3 days of the receipt of the request.

At Taylor Insolvency we commonly have bankrupts travelling, holidaying and working overseas, after all Bankruptcy is meant to help you with life not make it harder.

Bankruptcy and Property

The first question everyone has when considering bankruptcy is what will happen to my home. That depends on both how your estate is handled and who owns your family home.

Your real property form part of your Bankrupt Estate and must be realised by your Trustee. However, if possible we will realise your real property in such a manner that allows your family to keep and stay in your family home. The two most common methods are:-

Example 1 – Jane and Stuart

Stuart runs a plumbing business but due to unforeseen circumstances he has large outstanding debts that he cannot pay and has to go bankrupt.

Jane and Stuart both jointly own their home with a mortgage on it. The home is worth $500,000 with $450,000 owing on the mortgage. Therefore the equity or value in the property for Stuarts’ creditors (the people Stuart owes money to) is $50,000. As the property is jointly held, Stuart’s creditors only have access to half of that amount.

We will look at selling the property to Jane for approximately half this amount placing the property entirely in her name (pending bank approval and stamp duty).

Example 2 – Mary

Mary is a successful policewoman, however, illness and helping family members have left her in crippling debt with no choice but bankruptcy.

Mary owns a home worth $315,000 with $300,000 owed to the mortgagee. We would look at doing a Deed of Forbearance with Mary where instead of creditors selling the property and likely getting very little return after the costs of sale are included. Mary would pay $15,000 back to her Bankrupt Estate in return the for Trustee of the Bankrupt Estate to agree to not sell the property for the entirety of the time the property is vested in the Bankrupt Estate 3 years of bankruptcy and 6 years after that.

The property then remains as Mary’s and eventually legal title returns to her.

If possible, we will work out a way to both ensure creditors receive what they are entitled to and keep you in your family home.

Bankruptcy and Vehicles

The Bankruptcy Act allows you to keep your vehicle which includes cars or motorbikes mainly used for your transport so long as the value of this vehicle is not above $7,900.00

The value refers to the value of the vehicle less and outstanding loan you have left on the vehicle. I.e. if you have a Toyota worth $25,000 but a secured loan on the vehicle of $20,000 you would be able to retain this vehicle.

If your vehicle is above this amount and you still wish to keep it contact us to discuss how you can contribute to your Bankrupt Estate and still end up retaining the vehicle.

Feel free to call us on (02) 8488 3126 for an obligation free confidential discussion on Bankruptcy and how it will work for you.

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