2013 Surplus Income limits released

by Joel Sandwith on March 25, 2013

Around this time every year, the Office of the Superintendent of Bankruptcy releases a chart, which is used in the Bankruptcy process to help determine the ‘cost’ of filing bankruptcy.

This chart references the ‘Surplus Income’ guidelines for the year ahead.  For this year, the limits are:

Household of 1:  $2006

Household of 2: $2497

Household of 3: $3070

Household of 4: $3728

Household of 5: $4228

Household of 6: $4768

Household of 7 or more: $5309

One of the most common questions we get is: what is surplus income?

Basically the idea is this: depending on the number of people in your household, the government sets levels of income that can be earned (net, take home amounts), before you are considered to have a ‘surplus’.  If your income exceeds these levels, you may have to pay a portion (50%) of this ‘surplus’ into the bankruptcy.  Here’s a more detailed explanation: Surplus Income

What does this all mean to you?  Well, if you are dealing with debt, but have a decent income, a consumer proposal might be a better option.  Let me give you an example:

We have Bob and Linda come into our office.  Their debt is $40,000.  Their combined net income is $5,000.  They have two kids.  In a bankruptcy, the cost of surplus would be $636 per month!  BUT, if we try a proposal, it may be possible to lower that cost to $300, or even as low as $250 per month.  As you can imagine, every circumstance is different, but the basic idea in a proposal is to avoid a ‘surplus income’ calculation by making a deal with the creditors instead.

Dealing with debt?  Give us a call at 310-PLAN (7526) or locally at 519-344-1058, we’d be happy to go over all of your options, at no charge.

 

 

 

 

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