Can anyone explain surplus income?
August 26th, 2015 by Questions
Can anyone explain surplus income? The calculations online don’t seem to leave a family of 4 much to live on after expenses. Can anyone explain how it works after car/mortgage payments and all the monthly stuff?
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August 26, 2015 at 6:25 am, Doug Stuive, CA | Trustee | CIRP said:
Surplus income has always been difficult to explain to people. By it’s very name it seems to imply it is based on funds left over after paying out your monthly living expenses. This is not the case. These amounts are dictated by the Office the Superintendent of Bankruptcy and are applied across the country. The income that they feel a person of a certain family size should be able to live on may not be representative of your situation.. When you meet with a trustee they will help you calculate your required payment should you choose to file a bankruptcy. Expenses that can be used to decrease your required payments are payments of spousal or child support, expenses as a condition of employment (as indicated on a tax return), medical expenses for an on-going condition, day care costs and court fines. Regular expenses such as mortgage costs, car costs or other expenses that are part of your cost of living are not factored in to the equation.
If you have surplus income payments that you believe will be difficult to make it each month, your advisor will look at the option of filing a consumer proposal. This may cost you more than a bankruptcy in total but can often allow for a lower monthly payment.