The amount you are required to pay if you declare bankruptcy is based on your income. The more you earn, the more you are required to pay. This limit is adjusted each year, and the Office of the Superintendent of Bankruptcy has released the Surplus Income Limits for 2021, based on family size:
The bankruptcy surplus income limits for 2021 may look complicated, but the math is relatively simple.
If you are a family of two (such as a single parent with one child) and you earn $3,199 after tax each month, you are $400 over the limit for a family of two of $2,799, so you are required to make a surplus income payment of half of the amount you are over, or $200 per month.
If this is your first bankruptcy and your average income is more than $200 over the limit each month, your bankruptcy is extended for an additional year, so you would be bankrupt for a minimum of 21 months (instead of the basic 9 months).
Each situation is different, and in many cases a consumer proposal is a better option, so we suggest you contact a licensed Ontario bankruptcy trustee for a complete, no charge, no obligation review of your options.