As I mentioned in a post last week, the new bankruptcy rules are scheduled to come into force next month.  However, at the time I wrote the post the government hadn’t announced the details of the rules.

Specifically, I want to write about surplus income. Under the new rules, if someone in bankruptcy has surplus income their bankruptcy will last 21 months if a first time filer and 36 months if it is a second time bankruptcy. When I wrote the post last week I was unsure if there was a surplus income limit, and on August 19th, the government clarified that there is a guideline.

If your surplus income is greater than $200 on average, the bankruptcy will extend to 21 or 36 months.

So what does this mean to you? If you have been thinking about filing for bankruptcy and your income is greater than $200 above the income guidelines, you need to review whether it is better to file now or later. Each situation is unique, so it may not be as clear cut as just being $200 over the income limit.

It is important to come in and see me soon. You can call me at 310-PLAN to review how the new rules could impact you.