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Cost of Bankruptcy

My husband has to file for bankruptcy because of a judgement against him for $90,000. which he cannot pay. He only is filing, I am not. We have been told that he will have to pay surplus based on our incomes, which will change monthly. If my income is twice his, which brings us into surplus, then is it not me who is being charged the surplus, even though I am not the one going bankrupt. How do they consider this fair …. I am being penalized.

Posted from: Ontario

One Response to “Cost of Bankruptcy”

A licensed trustee said...

Bankruptcy payments are based on household income – it is simply the law. The amount of surplus income your spouse will actually pay is based on his portion of the family income, he will not be required to pay the entire surplus obligation.

For example, if the family is $1000 over teh government guideline and your income is 2/3 of the household total then the surplus your spouse will be required to pay will be $1000 x 1/3 (his share of the income) x 50% = $167.

I am sorry if you think that is unfair, but it is designed to balance the relief sought by the debtor with the rights of the creditors.