For some people they may incur additional costs in bankruptcy called “Surplus Payments”.
As well as the initial cost of the bankruptcy, in bankruptcy the government sets limits on what you can earn. Where the income goes over this amount, the government believes the bankrupt should pay as “surplus payments in bankruptcy”. Surplus payments are based upon how many family members are being supported by your income minus any exemptions.
Where the income goes over the set amount, the Bankruptcy Act requires the bankrupt to make surplus payments of fifty percent (50%) over the base amount. For example, if there are two adults and two children, the family would be allowed to earn 47,976 per year excluding any allowable expenses after taxes and allowable expenses. Surplus income is based upon the whole income for the family.
Where the family income is above the amount the bankrupt would have to pay 50% of the excess as surplus income payments. For example should the you earn an additional $200 dollars per month the cost of the bankruptcy would increase by 50% of $200 which would be $100.
Family Members / Income
- 1 person – $2,152 = $25,824/year
- 2 persons – $2,679 = $32,148/year
- 3 persons – $3293 = $39,516/year
- 4 persons – $3998 = $47,976/year
- 5 persons – $4535 = $54,420/year
- 6 persons – $5114 = $61,368/year
- 7 persons – $5694 = $68,328/year
The amount based upon what you are earning from all sources. Expenses like child support, medical costs, and child care are all deducted from the income before calculating what you should pay.
If your income goes up or down, or if there are changes to the number of people in your family, the trustee will take that into consideration – so the payment and your costs for bankruptcy can be modified.