Monthly Income and Expense Statements


Paragraph 3 of Directive No. 11R2, Surplus Income, requires the bankrupt to provide the trustee with monthly income and expense statements for the entire period of bankruptcy in order to determine whether or not the bankrupt has surplus income. However, it has come to the attention of the Office of the Superintendent of Bankruptcy (OSB) that this paragraph of the Directive has been interpreted differently across Canada by both trustees and OSB staff.


Several trustees use different approaches with good justifications and report good results. For example, some trustees are not asking the debtor for a monthly income and expense statement in situations where the debtor is an elderly person receiving a Canada Pension Plan (CPP) retirement pension and/or an Old Age Security (OAS) pension as these benefits generally constitute regular monthly income. Even when the income received seems regular and steady, the debtor is advised to contact the trustee in the event of a material change in his or her financial situation.


The OSB has decided to apply a practical approach to the interpretation of this requirement. Trustees must use their professional judgment in exercising their duty to apply due diligence when determining the bankrupt's average monthly income. The trustee's file should clearly document the method by which they have appropriately calculated the amount, if any, the bankrupt is required to pay to the estate. Consequently, the OSB will not intervene in the administration of these files, unless it becomes clear that the trustee has not fulfilled their duties and obligations.