household income

January 25th, 2007 by Questions

On another site, the trustee said a bankrupt\’s non-insolvent spouse can refuse to have his/her income taken into account for the purpose of surplus income calculations, however, the trustees on this site give the impression that they cannot. Which is correct and legal and what are the implications? If there is a dependent child, would the calculation then be based on two persons in the household?


One Response to “household income”

, A licensed trustee said:

Here’s how the law works: when a person files an assignment in bankruptcy they are required to disclose to their trustee the total income coming into their household to the best of their ability. That means disclosing their own income, their spouses, mature children or parents, rental income, etc, etc…

Unless you spouse has also filed bankruptcy, they may choose not to provide that information. They can be forced, but it is unlikely that would happen.

What normaly happens if your spouse refused to disclose their income and you state that you have no idea what they earn your trustee may arbitrarily assign an income to your spouse based on the families expenses and standard of living.

For example, let’s say that you earn $2000 and your spouse refuses to tell you how much they earn. If the families expenses run $4500 a month then it’s fair to assume your spouse earns at least $2500. In most cases, the trustee will over estimate, decide that your spouse makes $3500 and assess your surplus penalties based on that arbitrary assessment.

Sounds unfair? The quick fix is to provide your trustee with proof of what your spouses income really is.

Think of it this way – you are trying to obtain releif from your debts. In order to do so you need to follow the rules of the Bankruptcy Act. One of those rules requires payments based on household income. You can’t have the relief from your debts unless you disclose the income.

As I said, if your spouse hasn’t filed bankruptcy then they may choose not to co-operate. As a bankrupt, you have no choice, you have to co-operate if you want to obtain releif from your debts.

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