When a person files an Assignment in Bankruptcy, a portion of their take-home pay may be payable to the Trustee for the benefit of all creditors. The actual amount payable depends on several factors, such as the take-home pay of the family unit, the number of people in the family and whether the family has non-discretionary expenses such as child care or child support. Any questions you have with respect to surplus income can be addressed with the Trustee at the first assessment.
Surplus Income
Under the new bankruptcy Canada surplus rules (effective
On September 18, 2009), if you have surplus income greater than, on average, $200 per month, your bankruptcy is automatically extended for a further 12 months. Under the old rules a person who had never been bankrupt before would be automatically discharged in nine months in most cases. Under the new rules, a first time bankrupt with surplus income is now bankrupt for 21 months, and they are required to make surplus income payments for the entire 21 months. It’s easy to see how the new rules increased the cost of a bankruptcy in Canada for many people.
If you earn over the limit, you pay more, and your bankruptcy lasts for an extra year.
The surplus income in bankruptcy rules in Canada are very complicated. There are an infinite number of possible outcomes depending on your personal situation.
Before you decide to file bankruptcy, you need to have a detailed consultation with a licensed bankruptcy trustee, and you ask them to explain, in detail, how your surplus income payment will be calculated in your case. Spending ten minutes with a trustee and a calculator will help you prepare for your bankruptcy. The rules are complicated, and there may be cases where they don’t appear to be fair, but with proper research you can understand how the rules will effect you, and you can be prepared for all possible situations.
Contact us at one of our Alberta locations to setup a free initial consultation.
For more details on Income During Bankruptcy see Directive 11-R from the Office of the Superintendent of Bankruptcy Canada
Our qualified Alberta trustess are familiar with all aspects of Canadian bankruptcy law. We currently have offices in Calgary, Wetaskiwin, and Edmonton. We are sponsors of Bankruptcy Alberta.
Call now for a free consultation: 310-8888
|
| 
