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Bankruptcy While Legally Separated

Bankruptcy while Legally Separated – Me and my wife will be legally separated. I am in 4th month of my bankruptcy,she was not included in this process but the child income she was receiving was calculated in our family income whether to decide if we have surplus income. If we are legally separated, will this be deducted from our family income?

Thank you

Posted from: Ontario


One Response to “Bankruptcy While Legally Separated”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

In the case of a bankruptcy Directive 11R of the Bankruptcy and Insolvency Act dictates the required payments to the estate by the bankrupt. This takes into account a number of factors such as your household size, your household income and any non-discretionary expenses you and your household may have. Non-discretionary expense include such things as; medical expense, employment expenses, fines or penalties, child care expense etc. This can change on a monthly basis and is one of the reasons that your trustee is expecting that you submit regular income and expense reports to them together with the necessary pay stubs and receipts. If your household size should decrease then the Standard, (defined in Directive 11R) will change accordingly. If your household size changes, then your household income likely will change as well. This would be considered a material change and you should inform your trustee as soon as possible. Should the children remain with you then the children’s income will still be part of your household income. If the children do not remain with you, neither will their income. Depending on the family situation you may have to start paying child and/or spousal support. Should this be the case, these payments are considered non-discretionary expenses and may decrease your ‘net’ monthly income and reduce any surplus income obligations required by your trustee.