What is Surplus Income?

If you are bankrupt in Canada, you are required to make a payment to your bankruptcy estate each month. The more you make, the more you are required to pay each month. Each month that you are bankrupt you will send your trustee copies of your pay stubs and proof of any other income you have (such as child tax credits, pensions, or unemployment insurance), and based on your income the trustee calculates how much you are required to contribute to your estate.

The government allows you to earn a certain amount; if you earn more than that amount a portion of your surplus income is contributed to your estate.

If you are off sick during the month you may end up paying less; if you work overtime you may be required to pay more.

The calculation is somewhat complicated, so we have created a surplus income worksheet to explain the calculation in more detail. You can enter your income information and determine how much you would be required to pay if you go bankrupt.

In addition to the surplus income payment, there is also a base contribution required each month. Please contact us for more information. One of our associates would be pleased to help you with the calculation so that you can determine how much you would be required to pay if you go bankrupt.

If your surplus income is more than you can afford each month, a consumer proposal may be a better option. Contact us for more information.

Posted by J. Douglas Hoyes, CA, Trustee @ 8:44 AM

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