# Surplus Income: Two Persons in the Household and They Have Filed Bankruptcy Jointly

## Understanding Surplus Income: A Case Study of a Two-Person Household Filing Joint Bankruptcy

In the realm of bankruptcy, understanding surplus income can be quite challenging. This article will explore a hypothetical scenario involving a two-person household filing joint bankruptcy, aiming to shed light on the intricacies of surplus income calculation.

## What is Surplus Income?

Surplus income refers to the portion of a bankrupt individual’s income that exceeds the government-prescribed threshold. This excess income is subject to seizure by the bankruptcy trustee.

## The Concept of Joint Bankruptcy

Joint bankruptcy is a situation where two individuals, typically a couple, file for bankruptcy together. The trustee treats them as a single entity, especially when their debts are 90% similar or when it is administratively efficient to do so.

## Joint Bankruptcy: A Hypothetical Case

Let’s analyze a hypothetical scenario involving a couple, Jane and Steven, who have filed for bankruptcy jointly.

### Calculating Jane’s Income

Jane has a monthly income of \$875. Multiplying this by 2, we get a total of \$1,750.

2 x \$875 = \$1,750

### Calculating Steven’s Income

Steven’s monthly income is \$400. When multiplied by 4, this amounts to \$1,600.

4 x \$400 = \$1,600

## Determining Total Household Income

Combining Jane’s and Steven’s income, we obtain a total household income of \$3,350.

\$1,750 (Jane’s income) + \$1,600 (Steven’s income) = \$3,350 (Total household income)

### Applying the Government Threshold

The government threshold for a two-person household is \$2,328. Subtracting this from the total household income, we get \$1,022.

\$3,350 (Total household income) – \$2,328 (Government threshold) = \$1,022 (Income over the threshold)

## Calculating Surplus Income

The surplus income is calculated as 50% of the income exceeding the threshold. Hence, the surplus income in this case is \$511.

50% of \$1,022 = \$511 (Surplus income)

In this scenario, Jane and Steven are required to pay an additional \$511 to their trustee due to their surplus income.

### Conclusion

Understanding surplus income in the context of a joint bankruptcy filing can be quite complex. However, we hope that this article has simplified the process for you. Remember, it’s always wise to seek the advice of a qualified professional when dealing with financial matters of this nature.

## Surplus Income Calculation

Surplus Income: The portion of a bankrupt individual’s income exceeding the government-prescribed threshold.

Joint Bankruptcy: A situation where two individuals file for bankruptcy together and are treated as a single entity by the trustee.

Surplus income is calculated as 50% of the income over the government threshold.

Joint bankruptcy often occurs when the debts are substantially similar, or it makes sense from an administrative standpoint.

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