Glen Surplus Income If I File Bankruptcy Is My Spouses Income Included In Calculating How Much I Pay

2009-08-19

Hi, Glen. There is a formula that trustees must follow in calculating how much an individual must pay during a bankruptcy. The payment amount is based primarily on your income, but it does indirectly take into account income of other household members. The intent is to base your payments on your ability to pay. If you'd like to see the actual formula, you can go to the Superintendent of Bankruptcy's website - this is the federal government regulator in bankruptcy matters. Here is the link:Surplus Income. Here are the basics: - The formula uses your net income (after taxes and "non-discretionary" expenses like child support, child care, medical expenses, etc. have been deducted) and it incorporates income of other household members. - Then an amount is deducted for basic living expenses. The amount that's deducted is the Statistics Canada cost of living expenses for your size of household. You can see these amounts if you follow the Surplus Income link above. - With the amount left over, if your income was (for example) 60% of the total household income, then 60% of the amount left over would be assumed to come from your income. A percentage of this amount (usually 50%, but with high incomes, the percentage can be higher), is what you must pay each month into the bankruptcy. - In come cases, your payment under this formula can be zero. The payments are usually required for 9 months, but it can be longer. There are some changes coming into force on September 18, 2009 which will extend the length of time for these payment to a minimum of 21 months. I hope that was clear. Give me a call if you'd like me to run the calculation based on your income and see what your payment amount would be. Judy Scott Meyers Norris Penny - British Columbia 604-949-2113 [email protected]