How Much Does It Cost To Do A Bankruptcy

Hello, There is no limitation on how much money you can earn while in bankruptcy. However, there are surplus income guidelines established by the Superintendent of Bankruptcy under which an individual is required to pay into a bankruptcy estate a percentage of their income that is above the guideline or threshold. For example, the standard guideline for a household of one is currently $1,884 and the guideline for a household of two is $2,345. These amounts are net of tax deductions. Surplus income may also be reduced by certain non-discretionary expenses such as child support, alimony, health-related expenses, fines or penalties, and certain employment-related expenses (e.g. a truck driver’s meals on the road). Discretionary expenses such as groceries, rent/mortgage, utilities etc. are not applicable in calculating the amount of surplus income. An individual living as a household of one, earning $2,400.00 net of taxes per month with a $100 monthly medical expense would pay the following: $2,400 - 100 medical = $2,300 less the s/g of 1,884 = $416 x 50% = $208 per month. This surplus amount of $208 per month would be paid for 21 months assuming this is the first time the individual has filed for bankruptcy. A second time bankrupt would have to pay $208 monthly for 36 months. If you do not have surplus income according the Directive, the Trustee will charge you a base fee. This fee varies by office, firm, region etc. so you would have to contact a local Trustee to determine this amount. There is also a $75 filing fee for a first time bankruptcy or $150 if it is a second time. The Trustee must file your income tax return for the year of the bankruptcy. If you are entitled to a refund for that year, it would be an asset of your bankruptcy estate so you would lose the refund for that particular year. In addition, your GST credits may be retained by the Trustee for a period of approximately one to two years. However, if the funds held in your bankruptcy estate exceed a certain amount (right now it's a little less than $1,700), the GST credits retained by the Trustee will be returned to you. For more information contact an MNP Trustee in your area. Brad Milne, CIRP Trustee in Bankruptcy Brandon, Manitoba