Debt Thresholds
Find out the regulations and restrictions involved during a Bankruptcy or Part 9 Debt Agreement
The Bankruptcy Act 1966 and related regulations contain a number of thresholds, limits and other amounts that are regularly changed in line with the Consumer Price Index or the base pension rate. This is a list of amounts which are associated with Part 9 Debt Agreements and Bankruptcy applications. Please note this list is for general guidance only.
| Protected Property | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| Tools During Bankruptcy, you may keep tools used to earn an income up to the value of this limit. | $3,800 | s116(2)(c)(i) & R6.03B (1) & (2) |
| Vehicles A bankrupt may keep cars or motorbikes which are used mostly for transport. This limit refers to the equity - the value of the vehicle, less the sum owing. | $8,000 | s116(2)(ca) & R6.03B (3) & (4) |
| Limits updated each financial year | ||
| Credit Limit | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| While bankrupt or in a Part 9 Debt Agreement, you must disclose your debtor status when applying for credit, buying with credit, hire purchase or cheque for goods and services with a value higher than this limit. | $5,882 | s269(1)(a), (aa), (ab), (ac), (ad) & s304A(1)(j) |
| Limits updated quarterly | ||
According to The Bankruptcy Act regulation s149D(1)(c) and s304A(1)(g), a trustee may lodge an objection if a bankrupt engages in misleading conduct in respect of an amount, or combined amounts, which exceed this limit.
Warning: It is a criminal offence if you are bankrupt or subject to a debt agreement to obtain or attempt to obtain credit in certain circumstances. Severe penalties apply to these offences.
| Official Receiver allowances and advances | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| Attendance A person, other than a bankrupt, who attends before the Official Receiver or authorised officer to give evidence/information is entitled to this allowance. | $22 | s77D(1)(a) & s304A(1)(a) |
| Advances Where a person is required to attend before the Official Receiver. the Official Reciever must offer the following advances on allowances and reimbursement of expenses before a person begins travelling by: | ||
| • aircraft • private motor vehicle • other | $22 $22 $11 | s77E(2) & s304A(1)(b) s77E(3) & s304A(1)(c) s77E(4)(a) & (b) & s304A(1)(d) & (e) |
| Limits updated quarterly | ||
| Bankruptcy Notice | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| This is the minimum amount upon which a bankruptcy notice can be issued ( it may be comprised of one or more final judgements/orders). | $5,000 | s41 |
| The minimum judgement amount is set by the Bankruptcy Act and is not indexed. | ||
| Part 9 Debt Agreement eligibility | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| Unsecured Debts A person cannot propose a Part 9 Debt Agreement if their unsecured debts are more than this limit. | $118.063.40 | s185C(4)(b) & (5) |
| Unsecured Assets A person cannot propose a Part 9 Debt Agreement if their unsecured assets are more than this limit. | $236.126.80 | s185C(4)(c) & (5) |
| Income Level A person cannot propose a Part 9 Debt Agreement if their after-tax income for the year is more than this limit. | $88.547.55 | s185C(4)(d) & (5) |
| Limits updated biannually - 20 March and 20 September | ||
| Other Amounts | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| Registered trustee minimum remuneration entitlement Trustees who are appointed, or who consent to act, before 1 September 2017 in respect of the administration of a bankruptcy, PIA or s188 authority commencing or executed prior to 1 December 2010, may recover this amount as remuneration from the estate or, if there are insufficient funds in the estate, from the bankrupt. | $1,938 | s161B(1) and (2) - as in force prior to 1 December 2010 |
| Trustees who are appointed, or who consent to act, before 1 September 2017 in respect of the administration of a bankruptcy, PIA or s188 authority commencing or executed on or after 1 December 2010 may recover this amount as remuneration from the estate where remuneration otherwise payable is less than this amount. * This amount is not indexed. | $5,000* | s161B(1) |
| Limits updated quarterly | ||
| Registered trustee maximum default amount of remuneration Trustees who are appointed, or who consent to act, on or after 1 September 2017 in respect of the administration of a bankruptcy, PIA or s188 authority (regardless of date when the bankruptcy commences, or the PIA or s188 authority is executed) are entitled to this amount of remuneration if their remuneration is not determined by creditors, a committee of inspection or the Inspector-General in Bankruptcy. | $5,272 | s60-15 of Schedule 2 - as in force from 1 September 2017 |
| Limits updated each financial year | ||
| Extent of priority for employee amounts If an employee is owed money by a bankrupt, they are entitled to receive payment of any dividends issued in preference to those issued to other unsecured creditors, up to this limit. | $4,550 | s109(1)(e) and R6.02 |
| Limits updated each financial year | ||
| Income contributions | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| Base Income Threshold Amount (BITA) no dependants Used when calculating a bankrupt's income contributions | (net of tax) $59,031.70 | s139K |
| Actual Income Threshold Amount (AITA) with dependants Used when calculating a bankrupt's income contributions which vary according to the number of dependants. | s139K | |
| Number of Dependants | Income Limit | |
| 0 | $59,031.70 | |
| 1 | $69,657.41 | |
| 2 | $74,970.26 | |
| 3 | $77,921.84 | |
| 4 | $79,102.48 | |
| more than 4 | $80,283.11 | |
| Limits updated biannually: 20 March and 20 September | ||
| Dependants | Limit | Bankruptcy Act & Regulation |
|---|---|---|
| Amount a person can earn and still remain a 'dependant' A person may earn income up to this limit during the contribution assessment period and still be considered a dependant for the purpose of calculating a bankrupt's income contribution liability. | $3,708 | s139K and R6.15A |
| Limits updated quarterly | ||
