Cost of a Bankruptcy

Cost of a bankruptcy
Cost of a Bankruptcy

The cost of a bankruptcy is set by the Federal Government.  So, no matter which trustee you see in Canada the cost will be the same.   In the simplest cases the cost of a bankruptcy is a minimum of $1,800, which can be paid at the rate of $200 a month for 9 months.

This Bankruptcy Calculator will tell you the exact cost of a bankruptcy and how long you will be in bankruptcy.

In the vast majority of cases the person, filing bankruptcy, keeps all his assets and is out of bankruptcy (discharged) in nine months.

Each year the Federal Government reviews the cost of living and sets the cost of a bankruptcy, that the trustee is to collect from people filing bankruptcy.   The philosophy is that the debtor’s first obligation is to provide for himself and his family.  Once that threshold is met the debtor is obligated to pay 50% of the excess to the trustee for the benefit of the bankruptcy estate.

Cost of a Consumer Proposal:

The cost of a consumer proposal is also set by the Federal Government and comes out of the payments required to be make per the terms of the consumer proposal.

Here are the rules on how long a person will be in bankruptcy:

– 9 month automatic discharge for 1st. time bankrupts who fulfill all their duties and who do not have excess income. (Required monthly payment of less than $100.00 per month)

– 21 months (or more at the court’s discretion) for 1st. time bankrupts who fulfill all their duties. and who have excess income. (Required monthly payment of $100.00 per month or greater)

-24 months for 2nd time bankrupts who do not have excess income.(Required monthly payment of less than $100.00 per month)

-36 months for 2nd time bankrupts who have excess income. (Required monthly payment of $100.00 per month or greater)

-Bankrupts with personal income tax debt of $200,000.00 or more representing 75 percent or more of total unsecured claims, are not eligible for an automatic discharge. They must go to court for an adjudication.


 

Here’s an example of a single person earning  $2,200 a month, take home pay:

In this case the required monthly payments are $69.00, so this person will be out of bankruptcy (discharged) in nine months.   However, the minimum cost of $1,800. must be paid.

Monthly take home pay: $2,200
Less Standard for a single person (Chart below): $2,062
Balance: $138
@ 50% $69


Here’s an example of a married person earning  $2,800 a month, take home pay, and his wife earning $1,000 a month take home pay:

In this case the required monthly payments are $454.00, so this person will be out of bankruptcy (discharged) in 21 months.

Bankrupt’s available monthly income: $2,800
Other family unit member’s available monthly income: $1,000
Family unit’s available monthly income: $3,800
Minus Superintendent’s standard for a family unit of two (Chart below): $2,567
Total monthly surplus income: $1,233
Family Situation Adjustment
(2,800 ÷ 3,800 = 73.68%
$1,233 × 73.68% = $908.47)
$908.47
Payment required from bankrupt ($908.47 × 50% = $454.24) $454.24

 


The latest costs were published by the Office of the Superintendent of bankruptcy on March 27, 2015.

(50% of the values in the cells are the required monthly payments, when the bankrupt does not have a spouse or other family member contributing to the family income.)

Appendix A

Surplus Income Standards

(A minimum of approximately $200.00 a month for nine months is required to cover Bankruptcy Estate costs.)

 


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