Question: I just found out that my fiancee has around $35,000 in debt, including credit card, unpaid personal bill, line a credit (paying interest only) as well as being overdrawn. We live together in my home and share utility bills, food, line of credit (in my name with joint items). He has been paying for about 1/3 of our bills but because he's so strapped (with personal debt) he can't pay his. He makes $60,000 a year, has a vehicle valued at $1,800 - does he make too much to declare bankruptcy and if he can - can he get out of his debt but still help with our joint bills ???
Answer: If you file bankruptcy in Ontario, the amount you are required to pay while bankrupt is based on your net family income. Assuming your fiancee is currently a single person with no children, he is allowed to earn $1,870 per month (take home pay). He then would pay half of the first thousand he is over that amount, and three quarters of the rest. This is called surplus income. For example, $60,000 per year may be around a net after taxes of $3,750 per month, so the surplus owing would be $3,750 - $1,870 = $1,880, so 50% of $1,000 and 75% of $880 = $1,160 per month. (Here's a surplus income spreadsheet you can use to do the math).
If he is paying $1,160 per month in a bankruptcy, it is likely the bankruptcy would last for up to 21 months (instead of the usual 9), so for him a consumer proposal is probably a better option.
Either way, yes, if he files a bankruptcy or a proposal he will then be able to devote the rest of his income to helping with your living expenses.
Obviously the math is somewhat complicated, and it's a difficult decision, so we recommend that you meet with a licensed Ontario bankruptcy and proposal professional to review all of your options before making a decision.
Answer: If you file bankruptcy in Ontario, the amount you are required to pay while bankrupt is based on your net family income. Assuming your fiancee is currently a single person with no children, he is allowed to earn $1,870 per month (take home pay). He then would pay half of the first thousand he is over that amount, and three quarters of the rest. This is called surplus income. For example, $60,000 per year may be around a net after taxes of $3,750 per month, so the surplus owing would be $3,750 - $1,870 = $1,880, so 50% of $1,000 and 75% of $880 = $1,160 per month. (Here's a surplus income spreadsheet you can use to do the math).
If he is paying $1,160 per month in a bankruptcy, it is likely the bankruptcy would last for up to 21 months (instead of the usual 9), so for him a consumer proposal is probably a better option.
Either way, yes, if he files a bankruptcy or a proposal he will then be able to devote the rest of his income to helping with your living expenses.
Obviously the math is somewhat complicated, and it's a difficult decision, so we recommend that you meet with a licensed Ontario bankruptcy and proposal professional to review all of your options before making a decision.
Labels: bankruptcy, consumer proposal, surplus income
posted by Questions @ 2:39 PM
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