The Office of the Superintendent of Bankruptcy has just issued their 2021 surplus income directive, setting the surplus income limits for 2021. The full text can be found at OSB Directive 11R2-2021 which includes the new 2021 surplus income limits. The surplus income directive comes into force on March 23, 2021 and applies its surplus income limits to all calculations of surplus income made by a Trustee or the Court after that date.
What is surplus income in 2021?
The surplus income directive for 2021 defines the amount that a bankrupt must pay from their future income during their bankruptcy. The calculation is influenced by the bankrupt’s income, the number of people in the bankrupt’s household, as well as the size of the bankrupt’s family. A bankrupt earning more than the standard set by the 2021 surplus income directive will have to make additional payments to the Trustee. Moreover, bankrupts who are required to pay surplus income will be eligible to be discharged from bankruptcy 12 months later than those who don’t have to pay surplus income. A first-time bankrupt with surplus income would be eligible to be discharged after 21 months and a second-time (or later) bankrupt would be eligible after 36 months (instead of 9 and 24 months).
How much does a bankrupt pay in surplus income in 2021
The biggest change in the 2021 surplus income directive is that the the household income standards (surplus income limits) used to calculate surplus income have been updated.
The surplus income calculation is standard across all licensed insolvency trustees and the Court. The directive determines what monthly payments a bankrupt must make from their income each month until they would be eligible for an automatic discharge. Each year, the OSB updates their standards to reflect changes in the cost of living across the country, particularly inflation.
The surplus income limits for 2021 are:
| Number of Persons | Standard (2021/2022) |
|---|---|
| 1 | $2,248 |
| 2 | $2,799 |
| 3 | $3,441 |
| 4 | $4,178 |
| 5 | $4,739 |
| 6 | $5,345 |
| 7+ | $5,950 |
How do you calculate surplus income?
We have updated our surplus income examples which outlines how to calculate surplus income. Surplus income is just one component used to estimate the cost of bankruptcy. If you have any questions about calculating surplus income and how it may impact your bankruptcy, give us a call at 1 (844) 508-8088 or contact us.
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