Question:
I am thinking of filing for bankruptcy in Calgary Alberta as I owe $40,000 in credit card debt. I heard you are only allowed to make so much money while you are in Bankruptcy. Is this true? (I am single and my net take home pay is around $3000 a month.)
Answer:
This is not true. There is no restriction on the amount of money you can make while you are going through bankruptcy. The theory around bankruptcy is the more money you make, the more you can afford to pay your creditors and the longer you pay your creditors.
If you go bankrupt in Calgary and this is your first bankruptcy, given the amount of your income, you will be considered to have “surplus income”. There is a Directive issued by the Superintendent of Bankruptcy called “Surplus Income”, it is Directive 11R2 issued March 20, 2012.
In your case, the Superintendent’s Standard for a single person with no dependents is $1980 a month. What that means is if you make over the standard of $1980 per month, you are considered to have surplus income. For every dollar over and above this amount, you keep 50% and your creditors get 50%.
If your net monthly income was $2980, you are $1000 over the standard, ($2980 – $1980) therefore you would pay 50% or $500 to your trustee for the benefit of your creditors each month.
One of your duties is to report your monthly income and expenses and pay your surplus income payment to your Trustee. Assuming your income stays about the same each month , your bankruptcy period in this example would be 21 months.
