Disability
After 3 years of illness and operations I finally had to go on permanent disability. As my income plummeted and bills stayed the same I got myself into huge line of credit and card debt to pay everything. My question is how my income, LTD$1300, and CPP disability $950 a month will be surplused. I am told these are both fully taxable but tax is not withheld.
Any/all sources of income are subject to surplus therefore both your LTD and CPP will be included. Our practice is to estimate your monthly tax liability on these sources of income so that you may make monthly tax instalments during the bankrutpcy. Those instalments reduce your income before the surplus obligation is calculated.
For example, with $2,000 on non-tax (but taxable income) you should be making an instalment of $400. If you do then your income subject to the surplus rules would be $1600 ($2,000 – $400).
I hope this helps. Make sure you discuss all of thsi with your trustee before you file.