Question: I am a self employed carpenter and have a lot of debt that I have not been able to maintain. At the same time I have to pay for my tools, equipment truck and other operating costs. If I go bankrupt, how is my income viewed when you calculate surplus income regarding income before and after expenses.
Surplus Income payments for self employed contractors are calculated based on net income, or income after taxes.
If you had revenue of $4,000 in a month, but you had $1,000 worth of business expenses, your surplus income would be calculated based on $3,000 per month. Your bankruptcy trustee can explain this in more detail, and can give you some example surplus income calculations before you file so that you understand exactly how much you are likely to be required to pay for surplus income while bankrupt.