What is Surplus Income?

I know you are saying – there is no way I have ANY surplus income! However, when you file for bankruptcy, the regulatory body that oversees bankruptcy has established levels of income that, if you make over these amounts, a portion of your income has to be paid to the trustee toward the creditors in your bankruptcy estate.

The Superintendent of Bankruptcy has established that the amount you are required to pay if you are bankrupt is based on your family income, and that amount is adjusted for inflation each year by the government. The limits this year increased by about 2.8% from last year.

If you, combined with net earnings (if any) of any other family member who live with you, earn more than the limit allowed by the government (based on the number of family members in the household), you pay half of the amount you are over the limit each month during your bankruptcy. Also, the time of your bankruptcy is extended by twelve months.

For example, if there are two family members in the household, the combined net monthly income (after taxes) can be up to $2,597 before you have surplus income.

If the surplus income you have to pay it too much, we can review with you the alternative of a consumer proposal to deal with your debt problems. Surplus income is not required to be calculated or paid with these.

The surplus income rules are complicated over and above what is shown above – we suggest you read our detailed explanation of surplus income

Please call us at 416-504-1511 or 888-504-1511 or 05-443-4473 to review your situation and options – our consultation will be free.