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Bankruptcy with and without income surplus

How is it possible that a person in bankruptcy with NO job (and with no income surplus) gets discharged automatically after 9 months? A person with a job and making monthly income surplus has to stay in bankruptcy 9 months + 12 months with court order.

What happens to those bankrupt who loses his or her job within first 9 months or later? Does she/he still have to stay in bankruptcy mode?

Thanks in advance.

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One Response to “Bankruptcy with and without income surplus”

Barton Goth GCO Bankruptcy Trustees said...

The reason this is possible is because the legislation and the courts attempt to ensure that each debtor is treated in as equal a fashion as possible. As such a mechanism is provided so that those with higher means can be required to pay a proportionatly larger sum in bankruptcy.

I always look at it like this, the idea is that the court doesn’t want a single mother with 2 kids living on AISH and a single lawyer who is making sigificant money each moth to have to pay the identical amount in a bankruptcy, as clearly this wouldn’t be equitable.

However, keep in mind the additional 12 months is not guaranteed. You would be best to contact a local trustee hand have them review how the courts in your area have historically been operating.