If you are placed into bankruptcy, your assets are vested in a trustee. The usual period for a bankruptcy is three years, but this can be extended.
Until you are discharged from bankruptcy, excess credits, such as credits for pay as you go (PAYG) withheld amounts, are applied to reduce any debts. Any amount remaining from the credits is then refunded to you.
Once you are discharged from bankruptcy, any debts remaining from the pre-bankruptcy period are considered to be irrecoverable at law and written off. Assuming no other post-bankruptcy debts have been incurred, any excess credits arising after you have been discharged are refunded.
Bankruptcy does not release you from paying the balance of your accumulated Higher Education Loan Programme (HELP) debt for which an assessment has not yet issued.
About the Author
Warren Kruger is an Australian Tax Specialist and Advisor.
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About The Author
Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,enter your name and email address in the Opt In Box located on the top right hand side of this article.
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