Bankruptcy with and without income surplus

April 18th, 2007 by Questions

How is it possible that a person in bankruptcy with NO job (and with no income surplus) gets discharged automatically after 9 months? A person with a job and making monthly income surplus has to stay in bankruptcy 9 months + 12 months with court order.

What happens to those bankrupt who loses his or her job within first 9 months or later? Does she/he still have to stay in bankruptcy mode?

Thanks in advance.


One Response to “Bankruptcy with and without income surplus”

, Barton Goth GCO Bankruptcy Trustees said:

The reason this is possible is because the legislation and the courts attempt to ensure that each debtor is treated in as equal a fashion as possible. As such a mechanism is provided so that those with higher means can be required to pay a proportionatly larger sum in bankruptcy.

I always look at it like this, the idea is that the court doesn’t want a single mother with 2 kids living on AISH and a single lawyer who is making sigificant money each moth to have to pay the identical amount in a bankruptcy, as clearly this wouldn’t be equitable.

However, keep in mind the additional 12 months is not guaranteed. You would be best to contact a local trustee hand have them review how the courts in your area have historically been operating.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)