Your Income Affects How Long You Will Be Bankrupt

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Surplus Income Bankruptcy

What is Surplus Income?

The Superintendent of Bankruptcy issues standards regarding the required payments for a bankruptcy based on whether the bankrupt has  surplus income and whether their net income is more than $200 over the predetermined government threshold.  If you fall into this category, the length of your bankruptcy will be extended for another 12 months and you will be required to pay that surplus amount into your bankruptcy for the benefit of your creditors.

How Does Surplus Income Affect the Length of My Bankruptcy?

Once you have filed for bankruptcy, you are required to submit proof of income each month to determine the length of your bankruptcy period.

First Time BankruptcySecond Time BankruptcyThird Time Bankruptcy
No Surplus Income9 month bankruptcy24 month bankruptcyDetermined by court
Surplus Income21 month bankruptcy36 month bankruptcyDetermined by court
  • First time filers with no surplus income are discharged in 9 months.  Those with surplus income will remain in bankruptcy for 21 months.
  • Second time bankruptcy with no surplus income will be discharged in 24 months and second time filers with surplus income will be discharged in 36 months.
  • Third time bankruptcy conditions are determined by the court.

What Other Financial Changes Can Affect My Bankruptcy?

The following circumstances might affect your bankruptcy:

  • Your net income increasing or decreasing;
  • The net income of others in your family unit changing;
  • The number of persons in your family unit; and
  • Expenses known as non-discretionary expenses – child support, child care, etc.

Keep in mind that if your financial circumstances change during your bankruptcy period, you are required to notify your trustee, as the length of your bankruptcy and payment amounts may also change.

Please see our surplus income calculator to determine whether your income will affect the length of your bankruptcy.

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