Breaking News – Surplus Guidelines for 2012 finally updated

by Joel Sandwith on March 22, 2012

Each year, the Office of the Superintendent of Bankruptcy (OSB) provides a chart that details how much money you can make before they think you have a ‘surplus’ of income in bankruptcy.  The new numbers for 2012 were (finally!) just released.  You can read more about the specifics here: Surplus Guidelines

What does this mean?  Well, you can make a little bit more money this year before surplus kicks in.

How does this work?  Many people we meet with tell us they have no ‘surplus’ of income – it’s kind of an odd phrase when you are struggling financially.  Basically, the idea is that IF you file bankruptcy, your income is measured each month.  If your income is above the ‘surplus’ standards, you are required to pay a portion of that ‘surplus’ into the bankruptcy.

Here’s an example:  The surplus guideline for a family of four is now $3680.  Let’s say Jim and Pam, who have two kids, have a combined NET income in a month of $4000.  They are $320 over the guideline and would be required to pay $160 into their bankruptcy as a surplus payment.

Another example: Let’s say Michael, who is single, has income of $1800 per month, net take home.  The guideline for one person is $1980, so Michael has no surplus to pay.  But what if Michael’s income is $3000 per month?  His surplus now jumps to $510!  This is half of the amount that his income exceeds the surplus standard.  Michael would probably agree in this case that bankruptcy is not his best option, for him we might recommend considering a consumer proposal with a lower payment instead.

Confused?  Or, just interested in learning more about this, and what your options are?  Give us a call at 1866-747-0660 or locally at 519-344-1058 for a free evaluation.



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