What is surplus income?

What is surplus income in a bankruptcy?

Simply stated, the more you bring home each month the more you pay.

The Office of the Superintendent of Bankruptcy has issued guidelines stating how much money a family is allowed to make in a bankruptcy. The more family members, the greater the allowed income. Before calculating how much you have to pay each month we are allowed to consider certain expenses such as support payments and child care. You can see numerous examples of how to calculate surplus income at our surplus income page.

Is surplus income calculated on my income before or after tax?

After tax.

What about the fact I have a mortgage and car payment?

Sorry, but there is no allowance given for housing and car payments. The income limit is the same of everyone regardless of where you live or what you drive.

I have money left over each month. Does that mean I have to pay that to the Trustee?

It’s great that you are able to save money. But no, surplus income for bankruptcy is based on your net income and the guidelines. You are not penalized to being able to save money.

I am paid weekly. What happens when I have a 5 pay cheque month?

The limit is the same even if it’s a 5 pay month. However, the payments are make are based on your average income during the first 6 months of your bankruptcy.

Wow, that sounds confusing, is there any way I can avoid having to worry about whether or not I have surplus income?

Yes, when you file a consumer proposal, your payments are fixed. You don’t have to worry about being penalized if you earn more than allowed.