salary cap

March 29th, 2013 by Questions

I was told there is a cap of how much you can have to spend a month. I heard that you are only allowed to make 1200 a month and that has to pay for your rent, car payment and other living expenses. Is this true?

Posted from: Ontario


One Response to “salary cap”

, A licensed trustee said:

Nope – some one has confused two or three things about bankruptcy law. There is/are no spending caps – except of course you cannot spend more than you have since you will no longer have access to credit if you file for bankruptcy.

The government has established thresholds for income – the more you eanr the more expensive bankruptcy may become. There is no income cap either, you may earn as much as you are able, but once you go over the income threshold you have to start making additional payment into your bankruptcy for the benefit of your creditors.

Basically, once you make over the threshold, you split ever dollar you eanr after that with your creditors – they get 50 cents and you get 50 cents. There is no upper limit on the split – every dollar over the threshold is split.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)