Extra income during bankruptcy

In Anonymous Q & A, Bankruptcy, Niagara Falls, Ontario by Questions1 Comment

I am a single dad with kids. 4 months into my bankruptcy, I am wanting to move in with my girlfriend and her kids. is that allowed? do I have to claim her income, or just declare my income and expenses

Comments

  1. Doug Stuive, CA | Trustee | CIRP

    It is allowed. There are a couple of ways to report the change in your household and income.

    You should be aware that the government sets a guideline for the amount of income you are allowed to earn on a monthly basis depending on the size of the household during your bankruptcy without having to make extra payments. These extra payments, if applicable, are considered to be surplus income. For a first time bankrupt with surplus income, the earliest you are eligible to be discharged from your bankruptcy is 21 months. (36 months for second time bankrupts) I do not know how many children you have currently, so I am unable to determine what the current government guideline is applicable to your situation. Given that you are currently in bankruptcy, you should be aware if you are making surplus income payments.

    When you move in with your girlfriend, your household size is going to increase so the government guideline amount will also increase. Under the Bankruptcy Act you do have to disclose your new address and the number of people living in the household. You would also have to report the income of both yourself and your girlfriend. Depending on the income levels, this may have no impact on your bankruptcy or may create or vary any surplus income obligation.

    However, as your girlfriend is not involved in your bankruptcy, she has the option to refuse to disclose her income to your trustee. If that happens then you would notify your trustee that you have moved in with your girlfriend, update them as to the number of people in your household and advise them your girlfriend is not disclosing her income.

    The trustee would in this situation calculate if any amounts are owed for surplus income based on 50% of the new guideline amount applicable to your new family size.

    Depending on your new family size and the amount you earn either independently or together moving in with your girlfriend may change the amount you would have to pay to your trustee to receive your discharge.

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