Bankruptcy Kitchener Blog

Based on the statistics that the government released last Friday, personal bankruptcies in Kitchener-Waterloo increased 60% for the 3rd quarter (July – September) in 2009 over 2008. This is a significant increase when you consider the Canadian average was an increase of 47%. Even for consumer proposal filings in the 3rd quarter, Kitchener-Waterloo increased 43% versus the Canadian average of 39%.

These are staggering increases. Working in the Kitchener office, I have met with many people that were facing the decision of how to deal with their debts. There is a variety of reasons that someone has to file, here are a few key factors; the economy downturn has caught up with the Waterloo Region, the debt levels of the average person has increased, as well as a result of the new bankruptcy rules that came into effect on September 18, 2009. These are average people who fell under tough financial times and needed to obtain a fresh financial start.

To discuss actual numbers, in the 12 month period ending September 2009, total consumer bankruptcies and proposals in Canada totaled 148,378. This is a 36% increase over the same 12 month period ending September 2008.

If you are experiencing financial difficult in 2009, you are not alone. Call us at 519-747-0660 and we will discuss your situation in detail to help make PLAN for the future.

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This Saturday, November 14th, Howard Hayes and I will be spending the hour between 12:00 and 1:00pm answering your questions live on air on the Ask the Expert Show on 570 News. If you have questions and want to hear them answered, please send us an e-mail at this e-mail address created for this show. We will attempt to answer all of your questions.

We receive many e-mails from people in the Waterloo Region. These e-mails are asking questions about garnishments, personal bankruptcy, consumer proposals, assets, creditors, or any debt related question to name a few. Personal finance problems are stressful and overwhelming, so hopefully our live radio show will help you understand your options and how specifics in your situation will be handled.

As a Trustee in Bankruptcy, I am responsible for our Kitchener Office. I can be reached at 519-747-0660 or at this e-mail if you would like to talk specifically about your situation.

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When someone files for personal bankruptcy, the amount they have to pay depends on the number of people in the family unit and how much income the family makes. This is called “surplus income”. The concept of surplus income can be relatively confusing, so let me try to explain it generally.

The government sets a threshold amount. This amount represents the level of income an individual can make before having to pay extra into their bankruptcy. That is, if you have more income, then some amount should be paid to the creditors.

The surplus threshold is based on net income or take-home pay. Each year, the government adjusts the amounts. The thresholds for 2009 are:

Family Size – Monthly Threshold
1 – $1,870
2 – $2,328
3 – $2,862
4 – $3,474
5 – $3,941
6 – $4,444
7 or more – $4,948

Any amount an individual makes above these thresholds represents surplus income and as a result an individual must pay 50% of that number into a personal bankruptcy. For example, if a single person brings home $2270 per month, they would have $400 of surplus income of which they would have to pay $200 extra into their bankruptcy. The amount of surplus income decides the length of the bankruptcy. If the surplus income is on average is $200 or more, the bankruptcy will go for 21 months (9 months if less than $200). To see the directive from the government, follow this link.

For individuals that would expect to have a higher amount of surplus during their bankruptcy, a consumer proposal is an alternative plan to deal with debts through one manageable monthly payment.

If you are from Kitchener Waterloo area and are considering your options in dealing with your debts, I suggest that you call our Kitchener office at 310-PLAN or 519-747-0660 or e-mail me. We will review your options in detail and explain the concept of surplus income further. We can make a plan for your situation so that you can get a fresh financial start.

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