The Office of the Superintendent of Bankruptcy has announced the new surplus income limits for 2023 bankruptcy filings. We list the thresholds below and provide an example to help you understand what surplus income can mean for your bankruptcy filing.
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You can read more about the 2023 Bankruptcy Guidelines on our surplus income payments page, or you can use our surplus income calculator to do the math for you.
Numbers are nice, but what does this mean to you? Here’s the simple explanation:
If you declare bankruptcy, the more you earn, the more you pay. It’s that simple.
So, if you are a single parent with one child, you are a family of two, so your surplus income limit is $3,165 per month. If your net earnings (your income after tax, less child care and medical costs) are $3,565 per month, you are $400 over the limit, so you have $400 of surplus income.
If you are bankrupt you are required to pay half of your surplus income to your creditors, so in this example you would be making a surplus income payment of $200 per month.
If your income goes up, you pay more. If your income goes down, you pay less.
If you are considering bankruptcy, you should estimate your income during the bankruptcy period, so you can estimate your surplus income and therefore the cost of your bankruptcy. If you get a bonus, or work overtime at certain times during the year, or if you get laid off for part of the year those factors will influence your surplus income.
If you expect your income to increase and you are worried that you may pay a lot in surplus income, you could consider a consumer proposal as an alternative to bankruptcy. We negotiate a settlement with your creditors up front, so if your income increases later your payments don’t increase.
Which option is best for you? Contact us today and one of our professionals will calculate your options and help you decide which option is best for you.
If I declared bankruptcy in 2014, should I continue doing my monthly income/expense statements with the previous superintendent’s amount, or will the new 2015 surplus income limits now apply to me? For instance, when I declared bankruptcy, as a family of four we were allowed $3743, which is the figure I have used to calculate surplus income. Now the limit for a family of four has been raised to $3831, should I use this figure when preparing my monthly statements? Also, if the answer is yes, when did those figures become effective? I have been using the $3743 number since January 2015, but should I have been using the $3831 amount for the past five months instead? Thanks for your help!
Hi Krista. This is a question you should ask your trustee, since they are the ones doing the calculation when you submit your monthly income.
At Hoyes Michalos we adjust the number every year, so for us if you are bankrupt in 2015, we use the 2015 surplus income limits, regardless of the year you filed bankruptcy.