Complicated surplus income calculation

January 4th, 2013 by Questions

I have come to the end of my 36 month (2nd time) bankruptcy. My wife is self-employed and we have been claiming her monthly draw on surplus income with the understanding that her dividends would be added at this point. The only problem is that the trustee is adding the whole dividend onto the surplus income we have already claimed instead of the dividend minus the amount claimed. Is there a way for me to get a neutral party to determine what this amount should be?

Posted from: British Columbia

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One Response to “Complicated surplus income calculation”



, A licensed trustee said:

Any time you have a disagreement with a trustee over the surplus income calculation you have the right to request mediation from the Office of the Superintendent of Bankruptcy (the neutral third party you asked about).

The proper way to calculate surplus income for self-employed people is not based on draws or dividends. It should be based on the profitability of the business. So, add back the draws, add back the dividends and then see how much “profit” the business made. That’s the income for surplus purposes, divided by the number of months in the period.

If mediation doesn’t resolve your disagreement then you have the right to ask the Court to make a determination of your surplus income obligation. Think very carefully before you decide to go to Court – the judge has the right to decide whatever they think is “fair”, regardless of what the calculation says you should pay…

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