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- individual we've assisted

» Read success stories

Income during bankruptcy

Surplus income

Under the new bankruptcy Canada surplus rules (effective On September 18, 2009), if you have surplus income greater than, on average, $200 per month, your bankruptcy is automatically extended for a further 12 months. Under the old rules a person who had never been bankrupt before would be automatically discharged in nine months in most cases. Under the new rules, a first time bankrupt with surplus income is now bankrupt for 21 months, and they are required to make surplus income payments for the entire 21 months. It's easy to see how the new rules increased the cost of a bankruptcy in Canada for many people.

If you earn over the limit, you pay more, and your bankruptcy lasts for an extra year.

The surplus income in bankruptcy rules in Canada are very complicated. There are an infinite number of possible outcomes depending on your personal situation.

Before you decide to file bankruptcy in Alberta, you need to have a detailed consultation with a Licensed Insolvency Trustee, and you ask them to explain, in detail, how your surplus income payment will be calculated in your case. Spending ten minutes with a Trustee and a calculator will help you prepare for your bankruptcy. The rules are complicated, and there may be cases where they don't appear to be fair, but with proper research you can understand how the rules will effect you, and you can be prepared for all possible situations.

For more details on Income During Bankruptcy see Directive 11R2-2017 from the Office of the Superintendent of Bankruptcy Canada.

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When a person files an Assignment in Bankruptcy, a portion of their take-home pay may be payable to the Licensed Insolvency Trustee for the benefit of all creditors. The actual amount payable depends on several factors, such as the take-home pay of the family unit, the number of people in the family and whether the family has non-discretionary expenses such as child care or child support. Any questions you have with respect to surplus income can be addressed with the Trustee at the first assessment.

Surplus income calculator

This surplus income calculator is for information purposes only to assist bankrupts in the calculation of surplus income. Any surplus income payments calculated using this calculator are not deemed to be final but are subject to review by Grant Thornton Limited and thus subject to change, if required. Grant Thornton Limited reserves the right to review all information and calculations to ensure they meet the requirements of Directive 11-R2 of the Bankruptcy and Insolvency Act.


We can help

Our Licensed Insolvency Trustees (formerly called Trustee in Bankruptcy or Bankruptcy Trustee) and Estate Managers believe everyone deserves a financial fresh start, while being treated with dignity and respect. We have offices conveniently located in Calgary, Edmonton, throughout Alberta, and across Canada.

To speak to someone now call us at 310-8888 for a free, no obligation, confidential consultation.

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