Question: Hi, I read through the recent posts on surplus income and wanted to know in Ontario, if one has significant surplus income, how long beyond the 9 months will the bankruptcy be extended? Is there a general rule of thumb as to how many months it will be extended? Can a bankrupt mediate an agreement with a trustee or challenge the extension in court?
Answer: There is no general rule of thumb. If the surplus is a few hundred dollars per month the trustee and the bankrupt may agree to a “deemed opposition” where the bankruptcy is extended for a few months. If the surplus is significant the court can extend the bankruptcy for a further 12 months or more.
The bankrupt can request mediation to discuss the issue, and the bankrupt does have the right to appear at a discharge hearing in court to present their case before the judge.
If you expect to have significant surplus income, a better alternative is to file a consumer proposal and avoid the bankruptcy altogether.
It should also be noted that under proposed new rules if you have surplus income your bankruptcy will be automatically extended to a minimum of 21 months, so a consumer proposal may be an even more important bankruptcy alternative in the future.