2 minute read
Insolvency Matters
Tax time can be an exciting time of year for many Australians who anticipate getting a return. They welcome a little sum of money they can spend or splurge on anything they like.
However, not everyone receives a tax return. Many people will receive a tax debt this financial year and will need to find more money to give back to the tax man. For someone already experiencing debt or financial hardship, this tax debt is an unwelcome surprise.
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There are things you can do to make your tax debt a little more manageable including organising a payment arrangement, consolidating your tax debt or even including it in your Debt Agreement.
Repayment Plan/Payment Arrangement If you have a personal income tax debt less than $50,000 you can set up a repayment plan online. Even with a payment plan in place, you will be charged a general interest rate on the unpaid debt from the due date until it is repaid. The general interest rate is calculated quarterly but is currently set at 9.63 per cent.
Paying off your tax debt with a loan If your tax debt is unmanageable you might be able to consolidate your debts through refinancing. A major bank is unlikely to approve a loan to help you pay a tax debt. However, if you have enough equity in your mortgage, you might be able to obtain the cash through refinancing.
Debt Agreements for Tax Debt If your tax debt is just a small part of your overall debt problem, you might need to look at tackling your finances with a serious solution. ATO Debts can be included in a Part 9 Debt Agreement as well as all unsecured debts such as personal loans and credit cards. A Part 9 Debt Agreement is a legally binding agreement between you and your creditors outlining a new payment arrangement of your debts – one you can afford. Debt Agreements can often be negotiated to reduce your overall debt amount, freeze interest and stop all collection action. Entering a Debt Agreement is an act of Bankruptcy and should be carefully considered.
If you are struggling with your debts, seek professional help with someone who can help you come up with a financial action plan.
RILEY JACKSON Debt Relief Hotline ABOUT THE AUTHOR Riley Jackson has over 20 years’ experience in assisting and developing strategies for individuals and small businesses on ways to improve their financial circumstances. Based locally with Affiliates located across Australia, we are able to assist clients all over the nation.
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Debt Relief Hotline offers a range of positive solutions to your debt. Whether you are only just starting to feel the pinch or if your debts are spinning out of control, we have a solution for you.
Debt Relief Hotline is an authorised online representative of Insolvency Administration Services Pty Ltd (RDAA 1337). Insolvency Administration Services Pty Ltd is a Corporate Credit Representative of Positive Solutions Finance Pty Ltd (ACL 41872).
