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Sydney-Lawyer, Solicitor
Category: Australia Law
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Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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Hi, I have two questions about personal bankruptcy. I already

Resolved Question:

Hi, I have two questions about personal bankruptcy. I already have quite good knowledge about this, but I have a couple of specific quesitons.

1. I have a 2.5 year old daughter. She currently stays with me two nights a fortnight. Would I have any difficulty asserting that she is a dependent for bankruptcy purposes? What would I need to do to prove that I have a dependent?

2. I understand that if I earn below the income threshold, my income will not be garnished. However, what can I legally do with the money that I earn? Ie, once I subtract my expenses from my income, what may I do with the remainder? Is it acceptable to save this money in the bank? I have heard that if I were to invest in a term deposit, this would be taken by the trustee. What about an on-call, high interest bank account?

Can I save as much money as I like in the bank so long as I earn below the threshold? Or must I limit my savings to be only what would be reasonable to cover expenses? If it must be only what is reasonable to cover expenses, is six months living expenses (eg 15000) a good amount to go by? And if I can only save up until that amount, what can I legally do with additional savings that I have over the three years? Must I spend everything?

Submitted: 1 year ago.
Category: Australia Law
Expert:  Sydney-Lawyer replied 1 year ago.

Good Evening


1. Bankruptcy has nothing to do with her being a dependent.

2. You are permitted to save the money in a bank and use it as you need to. There is no set amount

Here is what ITSA say

7.3 How much money can I save during bankruptcy?
There is no set amount on the amount you can save during bankruptcy; however assets purchased with those funds will vest in the trustee. Any interest earned on accumulated savings will be classified as income.

Here the link that this if from.

http://www.itsa.gov.au/dir228/itsaweb.nsf/docindex/Bankruptcy-%3EFAQ

I hope this is of assistance and if so please click on the accept button.

Customer: replied 1 year ago.

If I accept this answer, will I be charged $84?

I appreciate your efforts, but I don't believe they are worth $84.

In relation to my daughter, the income threshold for bankruptcy is varied based on the number of dependents a person has. If my daughter is not counted as a dependent then my income threshold would drop.

Expert:  Sydney-Lawyer replied 1 year ago.

Good Morning


She is supposed to reside with you and require financial assistance.

You list her as a dependent on your bankruptcy and set out the child support you pay and also if you pay and any other financial contributions.

If you choose to accept you will be charged what you agree to pay and no more. It is up to you to accept.

I hope this is of assistance and if so please click on the accept button.

Sydney-Lawyer, Solicitor
Category: Australia Law
Positive Feedback: 96.2 %
Satisfied Customers: 17195
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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