Do you report your income for the month you file bankruptcy?
October 20th, 2014 by Questions
Hello,
Wondering when you file bankruptcy do you report your income for the month you filed if its already mid month. Reason I ask is because before we filed we had two paychecks out of 3 for the month of January and now upon getting our surplus income calculation sheet we noticed they included the month we filed which was income we earned prior to filling. Which makes a very significant difference for our average income. I’ve searched the FAQ’s and didn’t see anything saying which months they include. Originally we were told when we filed that we do not report income for the month we filed. Thanks very much.
Posted from: Ontario
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October 20, 2014 at 8:56 am, Doug Stuive, CA | Trustee | CIRP said:
Under Section 68 (a) of the Bankruptcy and Insolvency Act it does indicate that the calculation must include all of the bankrupt’s revenues between the date of the bankruptcy and the date of the bankrupt’s discharge. Using this section as a guide you could indicate to your trustee that they should amend their calculation to remove the income earned prior to your date of filing from their surplus calculation. However, this does not mean the entire month would need to be removed, but rather the calculation would need to be done from the date of the bankruptcy only. Depending on what day of the month you filed this may or may not affect your calculation as it stands currently.
In a year’s time, a person should receive two months with extra pay periods if they are paid weekly or biweekly. These extra pay periods must be included in your surplus income calculation as they form part of your income. Your surplus income obligation can fluctuate throughout your bankruptcy so it may be that even if you get the income from the month you filed removed from your surplus calculation, these extra pay periods may come up during your bankruptcy period and will increase your average surplus income at a later date.
If your trustee refuses to remove the income from before your date of bankruptcy from the surplus income calculation and if you do not agree that their calculation is accurate, you do have the option to request mediation through the Office of the Superintendent of Bankruptcy. That government agency can discuss that option with you in more detail if it is required.