Bankruptcy Rules

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Once in bankruptcy, earn what you like but over a certain amount you will have to pay contributions.

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If you are having trouble paying your personal debts, and if you are constantly being harassed by creditors, you should seek professional advice from an accountant, lawyer or a qualified insolvency practitioner.

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Compulsory Contribution Tables

The Bankruptcy Act contains a number of thresholds and limits that are regularly indexed. The tables below have just been released on 20 September 2019. In essence, a Bankrupt person can keep a car up to the value of $8,000 and tools used to earn income of $3,800.

Protected Assets and Limits	Limit	Note	Warning
Protected Assets and Limits Motor Vehicles	Limit $8,000	Note A bankrupt may keep a vehicle up to this limit. This amount refers to the equity in a vehicle subject to finance.	Warning
Protected Assets and Limits Tools	Limit $3,8000	Note A bankrupt may keep tools used to earn an income up to this limit.	Warning Failure to disclose status as a bankruptcy may result in criminal charges.
Protected Assets and Limits Credit Limit	Limit $5,812	Note A bankrupt or debt agreement debtor must disclose their bankrupt or debtor status when seeking any credit or finance above this limit.	Warning
Protected Assets and Limits Bankruptcy Notice	Limit $10,000	Note This is the minimum amount upon which a bankruptcy notice can be issued. Below this, a creditor cannot apply for bankruptcy of a debtor.	Warning Not an indexed amount.

Income Contributions

During the period of bankruptcy (normally 3 years until automatic discharge (unless release from bankruptcy is objected to by the Trustee)) there are no limits on the amount a bankrupt person may earn.

However, once a bankrupt person earns more than the statutory amounts, they are required to pay Income Contributions to their Bankrupt Estate. These payments only continue during the bankruptcy period.

Income Contributions	Limit
Below these amounts, based on number of dependents, a bankrupt will not have to pay income contributions. Above these amounts, contributions must be paid.
Number of Dependents	(after tax amounts)
Number of Dependents 0	(after tax amounts) $58,331.00
Number of Dependents 1	(after tax amounts) $68,830.58
Number of Dependents 2	(after tax amounts) $74,080.37
Number of Dependents 3	(after tax amounts) $76,996.92
Number of Dependents 4	(after tax amounts) $78,163.54
Number of Dependents Over 4	(after tax amounts) $79,330.16
Amounts are updated 20 March and 20 September each year

Part IX debt agreements & part x personal insolvency agreements

If your debts and income are below the amounts detailed, you may be eligible to undertake a Part IX Debt Agreement. Above these amounts, a Part X Personal Insolvency Agreement may be appropriate.

Eligibility for Part IX Debt Agreement or Part X Personal Insolvency Agreement	Limit
Eligibility for Part IX Debt Agreement or Part X Personal Insolvency Agreement Unsecured Debts If unsecured debts are below this limit, a Debt Agreement can be proposed. Above, the limit a Personal Insolvency Agreement applies.	Limit $116,662.00
Eligibility for Part IX Debt Agreement or Part X Personal Insolvency Agreement Unsecured Assets If divisible assets are below this limit, a Debt Agreement can be proposed. Above the limit, a Personal Insolvency Agreement applies.	Limit $233,324.00
Eligibility for Part IX Debt Agreement or Part X Personal Insolvency Agreement Income Level If income is below this level, a Debt Agreement can be proposed. Above the limit, a Personal Insolvency Agreement applies.	Limit $87,496.50 (net of tax)

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