bankruptcy surplus calculation

I think you may have misunderstood something that you have read.

The current law allows a trustee to extend a bankruptcy by up to 12 months if the bankrupt has high surplus income payments. The problem with the law is that “high” was never defined and not all trustees enforced the rule uniformly (in Toronto for example it became a marketing tool of sorts – some trustees would extend your bankruptcy and other would not).

When C-12 is fully implemented anyone with surplus income payments will automatically have their bankruptcy extended to 21 months. This removes all uncertainty and in that respect is more “fair”.

If your basic beef if with the entire concept of surplus, well, in my opinion it makes a certain amount of sense. The more you earn, the more you will be required to repay if you file for bankruptcy.

Bankruptcy is not a “get out of debt free card”, rather it tries to strike a balance between the honest, but unfortunate debtor and the poeple that loaned them money. Surplus income payments are one of those balance tools – under the threshold you keep all of the money, over the threshold you split it with your creditors, and if you are significantly over the threshold your creditors start to get an even larger share.

Think of it this way – it is simply part of the cost you pay in order to have relief from your debts.