During the period between an individual’s date of bankruptcy and their discharge from bankruptcy, if they earn enough income, they will be required to contribute some of their income to their bankruptcy estate for the benefit of their creditors.
What income level requires this contribution is decided annually by Canada’s Superintendent of Bankruptcy. The number of people in the bankrupt individual’s household determines the standard to be used, as shown below in the monthly standards for 2012.
If the family’s income for the month exceeds the Superintendent’s standard for that family’s size, then the bankrupt individual may be required to pay his or her share of this surplus income to the trustee. There are some deductions that are allowed to be made from the family income in making the necessary calculations, and only the bankrupt individual’s share of the family income is considered when calculating the actual amounts to be paid. All of this is detailed in the Superintendent’s Directive No. 11R2, which is governed by Section 68 of Canada’s Bankruptcy and Insolvency Act.
| Persons | Standard |
| 1 | $ 1,980 |
| 2 | 2,465 |
| 3 | 3,031 |
| 4 | 3,680 |
| 5 | 4,174 |
| 6 | 4,707 |
| 7+ | 5,241 |
It is important to note that if there are any surplus income payments required, then the automatic discharge period for first-time bankrupts is increased from 9 to 21 months. For second-time bankrupts, it is increased from 24 to 36 months.
I have provided a sample calculation of surplus income.
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