Bankruptcy is where you’ve decided or
one of your creditors has decided you can’t afford to pay all your debts, and
it gives you the opportunity to reset your financial situation over a period
of three years. When you go bankrupt the trustee does have the ability to access
your wages once you earn over the income threshold. The income thresholds are set
at a level to allow you to live and pay your basic expenses without undue
financial hardship. One of the good things about the
bankruptcy legislation is it protects your basic personal possessions. So
things like your clothes, your bed, your fridge, freezers – things that you need to
live – it’s not something that can be taken and sold by a bankruptcy trustee. If you
go bankrupt that will affect your credit report for five years and mean that you
are unable to successfully get a loan from a lender.