Here is the Canadian law requiring that payments of surplus income be made by an individual bankrupt to the trustee for the benefit of creditors:
[Excerpted from Canada’s Bankruptcy and Insolvency Act]
Directives re standard of living factors
68. (1) The Superintendent shall, by directive, establish in respect of the provinces or one or more bankruptcy districts or parts of bankruptcy districts, the standards for determining the portion of the total income of an individual bankrupt that exceeds that which is necessary to enable the bankrupt to maintain a reasonable standard of living.
[Editor’s note: Standards for surplus income payments and the method of calculation are issued by the Superintendent of Bankruptcy and adjusted annually for the cost of living. Click here for the 2010 standards.]
Interpretation
(2) For the purposes of this section,
(a) “total income” referred to in subsection (1) includes, notwithstanding paragraphs 67(1)(b) and (b.1), all revenues of a bankrupt of whatever nature or source; and
(b) a requirement that a bankrupt pay an amount to the estate of the bankrupt is enforceable against all property of the bankrupt, other than property referred to in paragraphs 67(1)(b) and (b.1).
[Editor’s note: Provincial laws protect a minimum of personal property from seizure, and particularly from bankruptcy. In Ontario the Execution Act specifies what property of an individual is exempt from bankruptcy.]
Trustee to fix amount to be paid
(3) The trustee shall
(a) having regard to the applicable standards established under subsection (1), and to the personal and family situation of the bankrupt, fix the amount that the bankrupt is required to pay to the estate of the bankrupt;
(b) inform the official receiver in writing of the amount fixed under paragraph (a); and
(c) take reasonable measures to ensure that the bankrupt complies with the requirement to pay.
Modification by trustee
(4) The trustee may, at any time, amend an amount fixed under subsection (3) to take into account
(a) material changes that have occurred in the personal or family situation of the bankrupt; or
(b) a recommendation made by the official receiver under subsection (5).
Official receiver recommendation
(5) Where the official receiver determines that the amount required to be paid by the bankrupt under subsection (3) or (4) is substantially not in accordance with the applicable standards established under subsection (1), the official receiver shall recommend to the trustee and to the bankrupt an amount required to be paid that the official receiver determines is in accordance with the applicable standards.
