On September 18, 2009 the federal government changed the bankruptcy rules. Under the old rules, a first time bankrupt was eligible to be discharged after nine months. Under the new rules now in effect, the length of bankruptcy is as follows:

What does this mean? If you have net income of more than $200 over the government allowed threshold (which for a single person is $1,926 in take-home pay per month in 2010), the length of your bankruptcy process will be extended for a further 12 months, and you will be required to continue to pay that surplus income into your bankruptcy estate for your creditors.

At Hoyes Michalos & Associates we believe that people who can pay a portion of their debts feel better about themselves if they can make payment arrangements with their creditors. These new provisions will no doubt cause more people to avoid bankruptcy by filing a consumer proposal, which for many people is the best solution.

Since this is a complicated area of bankruptcy law, please contact our bankruptcy trustee offices to schedule a free initial consultation. We will review your income, and explain how surplus income will be calculated in your situation, which will allow you to estimate the cost and length of your bankruptcy.

At Hoyes, Michalos and Associates we are proud to be a team of understanding professionals who are experts in bankruptcy, consumer proposals and all Ontario debt management options.

Be sure to contact us if you need help with your money problems.