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Bankruptcy and My Income?

Discussion in 'Debt and Bankruptcy Law Forum' started by Andrew Telep, 28 June 2014.

  1. Andrew Telep

    Andrew Telep Member

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    What happens with my income if I declare bankruptcy?
     
  2. Sophea

    Sophea Well-Known Member

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    Hi Andrew,

    When you file for bankruptcy, certain property of yours (known as divisible property under the Bankruptcy Act) becomes available to the trustee to pay your creditors or debtors. Your income is included in the divisible property above a certain amount.

    The NSW Legal Guidebook states with respect to income under bankruptcy:

    "While a person is bankruptcy they must make payments to the trustee from their income if they earn over a certain amount. This threshold income is linked to benefit payments under the Social Security Act 1991. For a person without dependants, the threshold his equal to the basic rate of pension for a married pensioner ($13,405.40 per year as at September 2011) multiplied by 3.5; that is, $47,265.40 per year. The threshold increases if there are dependants.

    If the bankrupt's assessed income is above the threshold amount, the bankrupt may pay 50cents in each dollar above the threshold...That is, what the bankrupt must pay the trustee for teh benefi
     
    John R likes this.

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