A lot of people think that if a person or a corporation becomes bankrupt, all of the property will be taken away from them and will be equally divided amongst the creditors. However, it does not work that way. The Australian government has made laws wherein the debtor can protect himself and his property from being confiscated. This means that he can keep his property if it is an integral part of the money making process as long as it is within the bankruptcy income threshold which will be discussed in this article. So, read on.
Why is there a need for an income threshold?
A bankruptcy income threshold is required by the government because it allows you to function well while being able to pay off your debts at the same time. What does that mean? It means that if you are in the state of bankruptcy and earning more than the income threshold, the excess money that you have earned will be given to your creditor. This saves you from going deeper into the abyss of debt and you have to thank the government for that.
The credit card limits of a person in bankruptcy is also regulated by the jury to help him or her avoid digging his or her own grave. As you know, whenever a credit card transaction occurs, compounded interests are also rising. Well, they are called credit card for a reason. So, if you are someone who is in debt, better avoid them.
What is the bankruptcy Australia income threshold?
As of July 27, 2016, the Australian Financial Security Authority has released a table wherein the limits of the amount of property and money a bankrupt person can own is indexed. Here are the data for bankruptcy income threshold:
· Tools (3,759 AUD) – Total worth or value of the tools that a bankrupt person can have to earn money and make a living out if it. Read more at Debt Mediators
· Vehicles (7,700 AUD) – Total worth of value that a bankrupt person can have when it comes to his or her motorized vehicle whether it is for personal use or for business.
· Credit limit (5,507 AUD) – The total amount of money that a bankrupt person can loan from a bank using a credit card. The debtor can use his card for whatever purpose that he wishes but he must make sure that he does not exceed it. Most of the time, both the creditors and the debtors agree that if the debtor exceeds the credit limit, a criminal case can be filed for him due to incompliance of an agreement with a court of law.
Things to remember
One of the most overused clichés in the world is “prevention is better than cure”. Well, it’s true, so before going bankrupt, make sure that you do all possible means to avoid it. If it requires you to have another loan to pay off your initial loan, then go for it. Debt consolidation loans by Debt Mediators Australia for Australia is only one of the many firms that you can go to. Unsecured personal loans debt consolidation is also done by the company mentioned above and the others that are within the same niche. So, be careful where you put your money.