January 2nd, 2007 by Questions
Do working children in the family unit have to pay 75% of their income to the surplus payments if the family has over a $1000 surplus per month? What happens if they refuse?
January 03, 2007 at 9:30 am, A licensed trustee said:
The quick answer to your question – your children will not be required to pay the surplus income penalty on their portion of the families income (unless your children have filed bankruptcy themselves).
Here’s an example of how surplus works:
Family of four, dad earns $2500 net a month, mom earns $1000 a month part-time, sonny earns $1000 a month, and sissy is still in school. Dad files for bankruptcy.
The families total income subject to surplus would be: $2500 + $1000 + $1000 + $0 = $4500.
The threshold for a family of four is $3,303.
The income subject to surplus is: $4500 – $3,303 = $1,197.
As dad is the only one that has filed, only his portion is penalized:
$1,197 x ($2,500/$4,500) = $665
The surplus payable would be:
$665 x 50% = $332.50
I hope that clears things up for you.
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