In the US, the average household has faced a debt of $130,922 in 2015, out of which 15,762 USD was on the credit cards only. So it seems that debt is an unworthy guest in many American households. It is very easy to dictate that people must simply pay off their balances to free themselves of this socio-economic burden, which is caused for financing various aspects. But it is not that easy. Experts have researched and found out that the ever increasing debt is not solely a result of irresponsible expenditure. There are numerous factors, which come to the fore in the inflated amount of debt that has been carried in homes all over the country. You shall have to start for your help debt repayment process once the repayment income reaches above the compulsory threshold of repayment, which is adjusted every year.
How is repayment income calculated
The compulsory repayment threshold alters every year and in the financial year 2015-2016, the compulsory threshold was $54,126 whereas for the year 2016-2017, the same is $54,869. This income is calculated from the figures shown by you on your income tax return for the part of your income that is taxable, fringe benefits reported on the payment summary, the total amount of net investment loss, including net rental loss, exempted foreign employment income figures and reported super contributions. The help debt repayment you make every year is a fraction of your net annual income. This share increases with an increase in your income and so the more you can earn, the more your repayments are going to be. If you are wondering how to get out of debt, then the authority shall calculate the compulsory repayment for that particular year and show it in your income tax notice.
Is it possible to pay back faster
In case you are looking for fast debt relief solutions, you will have to make a voluntary repayment to the concerned authority for any amount at any time. This voluntary amount is added to the compulsory help debt repayment figure that is shown in the tax return. If you make an excess repayment of $500, you are liable to be offered a bonus of 5 percent. This implies that your account shall be credited with an extra 5 percent value of the repayment and not 5 percent of the total debt you owe. You can either make this voluntary repayment through the credit card, direct credit or by giving a cheque to the concerned authority.
There are ample reasons why people may not know the credit card debt. In a recent survey, it was found that about 23 percent of individuals having a credit card say that they have been surprised by their bill at one point or the other. This implies that individuals have to struggle in keeping track of their balances. So it is important to know the exact amount of debt and start with a credit card debt repayment to get rid of this burden. There is no point of being ashamed of your balances, and instead you must aim at figuring out your net debt and then scheme a proper plan for eradicating the debt.
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