what is 7 month surplus income

There are quite detailed pages written on the subject of surplus income – do a search and some reading if you want a long answer.

Briefly, the government has set income thresholds for households of different sizes in Canada. The thresholds are designed to provide the household with a reasonable standard of living – that doesn’t necessarily mean “comfortable” and some people find it difficult to accept the government’s numbers.

If the household has income FROM ANY SOURCE in excess of the surplus income threshold then 50% of the excess is payable into the bankruptcy for the benefit of the person’s unsecured creditors. The reasoning seems ot be if you have more then the threhsold you get to keep half, but your creditors get the other half.

At the 7 month mark in a bankruptcy, your trustee will simply add up the stotal amoutn of surplus income you’ve been required to pay so far – if it exceeds $600 then your bankruptcy is automatically extended to 21 months.

Look for Directive 11R from the Office of the Superintendent of Bankruptcy if you want to read the actual regulations that your trustee is required to follow.