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Legal Tip 100: Loans from an associated entity to a bankrupt can be income

Discussion in 'Legal Issues' started by Terry_w, 3rd Nov, 2015.

  1. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Loans from an associated entity to a bankrupt can be income

    A person who is currently bankrupt can only earn a certain income before they are required to give some of that income to their trustee in bankruptcy. The current threshold is about $54k for a bankrupt without dependants.


    One strategy used in the past was to go bankrupt and then live on money provided by others such as spouses, trustees of discretionary trusts etc.


    This may be possible to a certain extent still, but any money loaned by an associate can be deemed to be income and therefore be subject to seizure.

    Section s139L(1)(a)(vi) of the Bankruptcy Act 1966



    s139L(1)(a)(vi) of the Bankruptcy Act 1966

    http://www.austlii.edu.au/au/legis/cth/consol_act/ba1966142/s139l.html
     
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  2. Greyghost

    Greyghost Well-Known Member

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    Happy 100th tip :)
     
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