What Happens If My Income Increases During My Bankruptcy?

The Impact of Income Changes on Bankruptcy: What You Need To Know

An increase in your earnings during bankruptcy can create a ripple effect on your financial obligations. This article explores the dynamics of What Happens If My Income Increases During My Bankruptcy? and provides comprehensive insights on managing such changes.

Bankruptcy Basics

Bankruptcy is a legal status that provides a lifeline for individuals or businesses struggling to meet their debt obligations. It grants a fresh start but comes with mandatory duties, one of which involves keeping track of monthly income and expenses1.

The Role of the Trustee

The trustee, appointed to oversee your bankruptcy, will provide you with the necessary forms for recording your income and expenses each month. This information, corroborated with pay stubs and other income proofs, is then forwarded to the trustee.

Surplus Income and Bankruptcy

One of the key terms in bankruptcy is surplus income. This is the extra income that exceeds the limit set by the government for a family of your size. If your income crosses this threshold, you are required to contribute half of the surplus towards your bankruptcy payments.

Impact of Income Changes on Surplus Income Payments

Any change in your earnings, whether an increase or decrease, will affect your surplus income calculations. For instance, if your income rises due to a salary hike or a new job, your surplus income payments are likely to increase. Conversely, if you lose your job, the required payment will probably decrease.

Fluctuating Incomes and Surplus Payments

For those with variable incomes, such as commission-based workers, surplus income payments can fluctuate month-to-month, in tandem with their earnings.

The Importance of Income and Expense Tracking

While the task of tracking your income and expenses may seem daunting, it comes with a silver lining. It provides insights into your spending habits, equipping you to manage your finances better and avoid future fiscal problems post-bankruptcy.

The Consultation Process

Understanding the implications of income changes during bankruptcy can be complex. Therefore, it’s advisable to consult with insolvency experts. These professionals can provide a detailed assessment of your situation and guide you on how to navigate the changes.


Changes in income during bankruptcy can have significant consequences. By understanding these effects and working closely with insolvency experts, you can navigate these changes with confidence, ensuring your journey to financial recovery remains on track.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.