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New – What is Surplus Income Payments

Updated 2023

How is surplus income identified?

How surplus income is calculated, is specified under the Bankruptcy & Insolvency Act. It differs for each individual based on their family members circumstances. Whether or not you will certainly need to make surplus income settlements, and how much you will certainly have to pay, will certainly depend upon:

If you have surplus income as well as it is your very first bankruptcy, you will certainly need to make those payments for 21 months. If it is your second bankruptcy, you will certainly have to make those payments for 36 months.

  • Just how much your household gains each month;
  • The number of dependents remains in your family;
  • The extent of eligible expenditures you may be enabled to deduct.

Monthly that a person continues to be insolvent they are needed to send a statement of revenue and expenditure to their trustee.

This is truly just a list of every one of the different types of earnings that entered into the household (paycheques, support repayments, kid tax benefits, lease from lessees – all cash coming in, no matter the resource) as well as exactly how that cash was invested.

The trustee will certainly utilize this record to figure out if any type of surplus income is owed by the bankrupt.

The amount of surplus income you are required to pay is based upon the following:


Earnings include the take away pay of everyone living in the family of the insolvent. If in our instance David had a spouse, her revenue would have been added to David’s to identify the total house income.
Reductions include assistance repayments, child care payments, medical bills, penalties as well as charges, any other work expense that you typically subtract when preparing your revenue taxes.

Limit: set by the Office of the Superintendent of Bankruptcy It is based upon the variety of individuals dealing with the insolvent. Please use our cost-free surplus income calculator for even more details.
Repayment: if more than a single person’s income is included in the Net Income figure, the necessary settlement is pro-rated per individual based on their income’s portion of the total.

Your trustee will certainly likewise take a look at how much of the household revenue you gain on your own. As an example, if you earn 40% of the house earnings, then you would only have to pay 40% of the surplus income repayment computed by your trustee.


Your Surplus Income Can Determine The Length Of Your Bankruptcy.

Surplus income is one of the primary elements that figure out the length of your bankruptcy. If your quantity of surplus income is less than $100 each month, after that you are qualified to be released from bankruptcy in just 9 months (24 months if this is not your initial bankruptcy.)

Nonetheless, if your surplus income is more than $200 per month, the size of your bankruptcy will instantly be prolonged. This suggests that you will certainly be needed to make surplus income settlements for 21 months (36 months if this is not your very first bankruptcy.).

Below are the surplus income restrictions for 2021, based upon family size:

Household Size Limit.


  1. $ 2,243.
  2. $ 2,793.
  3. $ 3,433.
  4. $ 4,168.
  5. $ 4,728.
  6. $ 5,332.
  7. $ 5,936.

It is really vital that you recognize exactly how surplus income and also surplus income calculation job and also what your tasks, as well as obligations in this regard, are during your bankruptcy.

Your surplus income is the amount that your take-home pay surpasses the surplus income limit.

Influence on the Discharge of a Bankrupt.

The amount of surplus income you have to pay, if any type of, will certainly impact the length of time your bankruptcy will certainly last, as follows:.

  • 1st time insolvent – no surplus income responsibility payable – eligible for an automated discharge at 9 months.
  • A first time bankrupt – surplus income commitment payable of $100/month or even more – eligible for an automatic discharge after payment of surplus for a duration of 21 months.
  • A second time bankrupt – no surplus income commitment payable – eligible for an automated discharge at 24 months.
  • A second time bankrupt – surplus income responsibility payable of $100/month or even more – eligible for an automated discharge after the settlement of surplus for a period of 36 months.
    In all various other scenarios, an application to Court for an order of discharge will be called for.

As an example, if a solitary parent with two youngsters has earnings of $4,433 in one month, the computation is:

$ 4,433 – $3,433 (the limit for a family of three from the table over).

= $1,000 in surplus income.

More than Your Pay Cheque is Considered.

Your trustee takes more rights into account than simply your pay-cheque. When calculating the quantity of surplus income you will certainly require to pay, your trustee utilizes the complying with the formula:.

Net Income – Income Threshold = Surplus x 50% = Surplus Income Payment.

Reporting your Income is One of Your Duties in Bankruptcy.

Routinely reporting your revenue as well as details expenses and also making surplus income repayments, as needed, is just one of your tasks during bankruptcy.

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