Bankruptcy is designed to protect your income to ensure you can still meet your essential needs. How much income you can keep depends on how many dependants you have.
The amount of income you can keep each year, in after-tax dollars is:
|Over 4 Dependants||$77,845.04|
A dependant is someone who lives with you, who does not earn more than $3,610 per year before tax (no tax payable at this level of income).
A husband and wife can each claim all their children as dependants. A separated couple can each claim their children as dependants if they have joint custody and they each have a bedroom allocated for the child.
The ‘threshold amount’ is adjusted twice a year, on 20 March and 20 September.
The ‘threshold amount’ is increased by amounts paid through the Child Support Agency for the support of children from a previous relationship.
For any amount you earn that is more than your ‘threshold amount’ in after-tax dollars, you keep half and the other half is paid to your bankrupt estate.
More information about income during bankruptcy is available on this in the following articles; Bankruptcy – Income Contributions & Salary Packaging, Bankruptcy – An introduction to income contributions, and Bankruptcy – what happens to your income during bankruptcy, or call Alan Nicholls on 1300 060 122.