Calculation of Surplus Income including pensions
I’m looking for answers of how to determine the calculation of surplus income including pensions. Unfortunately, bankruptcy is going to be inevitable in my situation. I have not spoken to a trustee. Not retired I only receive an employee pension, CPP and OAS as my sole household income. Combined, the pension amounts exceed the 2015 single household surplus income limit of $2,062. Will I be required to pay out of my pensions any amounts that are above the 2015 limit? Thanks.
The $2,062 that you are referring to is the surplus income guideline for a single person for the year 2015. In bankruptcy if you earn over that guideline by more then $200 then you will have to make payments to your bankruptcy estate. The amount that you have to pay is 50% of the amount that is over the limit of $2,062.00 per month. So for example is you earn income of $2,862 per month then you would be required to pay $400.00 each month for a period of 21 months for a first bankruptcy or 36 months if you have been bankrupt before. These requirements are mandatory and are the same for all bankrupts across Canada.
There are some expenses, including medical expenses for an on-going condition, that can lower the amount you are required to pay. For example, if you earn $2,862 per month in income but you have $200 in prescription drug costs because you have a medical condition, then your required payment would be $300.00 per month. The medical expenses are subtracted from your net income and therefore reduce the amount you need to pay in bankruptcy.
When an individual has high surplus income payments, the trustee will look at your situation to see if a consumer proposal is a better choice for dealing with your debt issues. This may allow for an overall lower payment monthly but for perhaps a longer period of time. If you schedule a free consultation with a licensed trustee they will be able to give you a clearer picture of your situation.