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What happens if my financial situation improves during bankruptcy? It sometimes happens that a person in bankruptcy has a dramatic change in his financial situation such as getting a promotion at work along with a great increase in pay. Perhaps, the person was out of work and then during the bankruptcy he got a high paying job. You have options.
What happens if my financial situation improves during bankruptcy? Pay more money in the bankruptcy
Most first time bankrupts are in bankruptcy for 9 months and have to pay the minimum of $1,800.00 payable at the rate of $200.00 a month for 9 month. A person in bankruptcy has his income averaged over the first 7 or 8 months. If the required payments exceed $100.00 per month over the first 7 or 8 months, the bankrupt must make the monthly payments for 21 months rather than 9 months. You can find out the exact cost of a bankruptcy and how long you will be in bankruptcy at our bankruptcy calculator.
What happens if my financial situation improves during bankruptcy? Convert your bankruptcy to a consumer proposal.
This may be to your advantage because a successful consumer proposal will cancel your bankruptcy. You also may end up making smaller payments in the consumer proposal.
You should ask your trustee to give you various options so you can make the best decision.
If you have any questions about this or other aspects of bankruptcy or consumer proposals you can set up a FREE consultation with our trustees, who are in every province and territory in Canada.