Will I have to pay income contributions whilst I am bankrupt?

If you earn an income you are obliged to declare your income to your Bankruptcy Trustee and if you exceed the statutory thresholds you will be liable to make statutory income contributions to your estate. The current thresholds are as follows:

The before tax amounts are approximations only and are for Australian residents.  Tax for non-residents will be assessed with different rates. If you are unsure, speak to your tax agent or advisor.

We have a bankruptcy contribution calculator which will help you assess your liability.  Click here to use our bankruptcy income calculator.

The Bankruptcy Trustee will issue an income contribution assessment for each year of your bankruptcy. The Bankruptcy Trustee may require that these contributions be paid monthly. If you fail to pay the income contributions your Bankruptcy Trustee can garnishee your wages.

A bankrupt’s income is defined as including money received from their employer and any other benefit, for example the private use of a motor vehicle or subsidised housing. Other factors are then considered and include the amount of income tax payable, maintenance payable, and the number of your dependants.