thinking of a personnal bankkruptcy and how it will affect purchase of medical devices and medication
December 21st, 2012 by Questions
I’m thinking of filing for personal bankruptcy in Ontario… after taxes I take home just about $1150.00 every 2 weeks. from what I could find online, a single person can keep up to 1800 and some change for monthly living expenses. but I have medical conditions that makes it that I pay over $200 a month in prescribed medication for ongoing treatment (sleep apnea and asthma)
does this means that I will be able to keep a little more money, therefore not putting me in a situation to pay surplus income and have to be bankrupt for 21 months instead of 9 (this would be my first bankruptcy). As well does bankruptcy includes: E.I. overpayment (currently I pay back $125 a month with $5500 balance left to pay). What happens when I have large medical items that I need to purchase such as breathing masks for cpap machine (approx $300), custom made knee brace for daily use from a surgery I just had with a 2nd one in a couple months from now?
Posted from: Ontario
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December 21, 2012 at 10:00 pm, A licensed trustee said:
You really need to speak directly to a trustee about your situation, but I’ll offer some comments that hopefully clarify some of the rules.
When an individual files for bankruptcy they are subject to the Surplus Income Directive (Directive 11r2 if you want to look it up). It sets out the rules for determining if a person has to make payments into their bankurptcy based on thier income and family size. These payments are in addition to paying for any assets you want to keep, or payments to cover the basic cost of filing for bankrutpcy.
Currently, the law says a single person is permitted total monthly income of $1980 before they are required to make any additional payments. Medical costs that added to that figure – you mentioned $200 for medications and some months extra payments of $300 for additional supplies. In your case the limit will be $1980 + $200 + $300 in the months you buy the extra supplies for a total of $2480. That number is larger than your income so you would not be required to make any extra payments for surplus income.
When you speak to a trustee they will explain this all in much greater detail.
Your EI overpayment is more problematic – in my opinion, from a legal perspective, your overpayment is eliminated when you file for bankruptcy UNLESS the government proves that you misrepresented your situation to collect the benefit (saying you did is not proving you did). From a practical standpoint, what the government generally does, is claw back any future benefits you apply for to recover their money. I don’t hink it is legal, but then unemployed people can’t afford a lawyer to fight for their EI cheques…