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.


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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