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Dependents in a Bankruptcy in Canada

I know that dependents allow you to keep more during a bankruptcy.

If I have my boys part time and pay support do they count as dependents? I have two boys that I take part time plus I pay child support.

Why I ask if my two boys, who live with me part-time, count as dependants, for bankruptcy purposes is:

1) CRA disallowed my equivalent to marriage claim stating they don’t live with me enough (though they live with me part time) – possibly this is due to me paying support although I just pay it for my youngest

2) For student loan interest relief purposes I have only 1 dependant, as when I started interest relief my autistic child didn’t live part time with me

So for bankruptcy purposes how many dependents do I have? Do #1 or #2 matter? How do I prove they’re dependents?

PS I love this service. I mean, it helps prepare me for the eventual event. It’s a great service! Thank you!

One Response to “Dependents in a Bankruptcy in Canada”

A licensed trustee said...

You raise an interesting question. You are correct that the amount of money you are required to contribute to your estate while bankrupt depends on your monthly income, and the size of your family. Under current rules, a family of two starts paying the surplus income once the family income is over $2,141 per month; for a family of three the limit is $2,662.
Unfortunately the government’s guidelines do not anticipate “half” children. In your example you have two children who live with you part time. It therefore appears that you have two “half” children, or the equivalent of one child.
In your example it will be up to the trustee to determine your family size for the purposes of the surplus income calculation. The trustee may determine that even though the children are with you part time, you cover most of their expenses (clothes, schooling, sports, etc.) and therefore you are entitled to claim two dependents. Alternatively, the trustee may decide that you pay half the costs, and therefore you have the equivalent of one dependent.
Either way, we recommend that you contact a licensed trustee to discuss your situation before you file for bankruptcy.