Question: My spouse is 66 and not working,was laid off 10 years ago, wants to work but has not been able to find permanent employment. Has no RRSP money left, is collecting pension and has rather large bank loan so does not have much money to contribute towards living expenses.
I am over 65 and still working to support both of us but want to retire. My salary is good but if I retire my pension income will not cover our living expenses and most of my spouse’s pension goes to the bank loan.
If my spouse declares bankruptcy and I am still working how does the surplus income work. Is my salary considered also? If so I may have to consider retiring before bankruptcy is declared.
Help. I am tired and want a life. We live frugaly as we have no extra money to do anything extra.
Thank you.
Answer: Yes, your income is considered for purposes of the surplus income calculation. In a bankruptcy, the more the family earns, the more you are required to pay. However, the bankrupt only pays the surplus income based on their portion of the family income, so the amount your spouse would pay if she went bankrupt is more dependent on her income than on yours. There are good articles on the internet about surplus income, but since the calculation is somewhat complicated we recommend you meet with a trustee to have the calculation done for you before you decide to file bankruptcy.