Bankruptcy Indexed Amounts

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Bankruptcy Indexed Amounts

In a bankruptcy, there are certain limits/amounts that impact a bankruptcy, including:

    • The number of assets that can be retained by a Bankrupt
    • The amount of income that can be earned before the Bankrupt is liable to pay amounts to the bankruptcy
    • The amount of credit that can be obtained by a Bankrupt, without providing disclosure

Below are some of the main indexed amounts that impact a bankruptcy. A full list of the indexed amounts is available at the website of the Australian Financial Security Authority (AFSA) – Indexed amounts | Australian Financial Security Authority (afsa.gov.au).

Protected property — assets a bankrupt person can keep Updated each financial year
Limit, threshold or payment Amount Bankruptcy Act & Regulations
Tools: Up to this total value, you can keep property used to earn income by physical exertion (tools of trade). $3,800 s116(2)(c)(i) r29
Vehicles: You can keep cars or motorbikes you use mainly for transport worth up to this amount. If you haven’t paid off the vehicle, the amount that counts towards the limit is its value minus what you still owe. $8,150 s116(2)(ca) r30
Amount of credit etc. you can get without telling the lender about your bankruptcy or debt agreement. Updated quarterly
Limit, threshold or payment Amount Bankruptcy Act & Regulations
Above this limit, you must disclose that you're bankrupt or in a debt agreement before you can:
 
  • buy goods or services on credit, by hire purchase or by cheque
  • lease, hire or promise to pay for goods or services
  • promise to supply goods or services in return for payment
$6,065 s269(1)(a), (aa), (ab), (ac), (ad) s304A(1)(j)
Warning! It is a criminal offence if you are bankrupt or subject to a debt agreement to obtain or attempt to obtain credit in certain circumstances. Severe penalties apply to these offences.
The trustee can lodge an objection if you are bankrupt and engage in misleading conduct relating to amounts that are, or add up to, more than the limit. $6,065 s149D(1)(c) and s304A(1)(g)
Income contributions from the bankrupt person Updated 20 March and 20 September
Limit, threshold or payment Amount Bankruptcy Act & Regulations
Base Income Threshold Amount (BITA) $60,515.00 (after tax) s139K
Actual Income Threshold Amount (AITA)
Over this amount, half of any income you get goes towards repaying creditors. The applicable threshold depends on how many dependants you have. (all amounts after tax) s139K
Number of dependants Income
0 $60,515.00
1 $71,407.70
2 $76,854.05
3 $79,879.80
4 $81,090.10
more than 4 $82,300.40
How much someone can earn and still be a dependant (used when calculating income contributions) Updated each financial year
Limit, threshold or payment Amount Bankruptcy Act & Regulations
A person who resides with you and who depends on you for economic support can earn income up to this limit during the income contribution assessment period and still count as your dependant. $3,782 s139K and r36

Article written by Jason Cronan (Director) – SV Partners Sunshine Coast

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