Discharge From Bankruptcy in Alberta, AB: A Comprehensive Guide
The Alberta Bankruptcy Discharge is the final and most crucial step in the bankruptcy procedure. It is the legal process that absolves you from the obligation to repay your debts. Here, we will delve into the intricacies of this process, the conditions affecting the length of your bankruptcy, and the impact of not being discharged.
The Significance of Bankruptcy Discharge
Upon filing for bankruptcy, an automatic stay comes into effect, preventing your creditors from directly collecting money from you. However, your debts don’t vanish until you receive your discharge. Hence, the Alberta Bankruptcy Discharge is quintessential to eradicate your debts.
The Tenure of Bankruptcy
The duration of bankruptcy varies depending on several factors. Typically, most bankrupts qualify for an automatic discharge after nine months. However, specific circumstances can alter this timeframe.
Bankruptcy History
If you have previously filed for bankruptcy, you won’t be eligible for a discharge in nine months. Instead, your bankruptcy period will be extended. For instance, for a second-time bankrupt, the bankruptcy period extends to 24 months.
Surplus Income
The government sets a minimum income level. If your surplus income surpasses this minimum, your bankruptcy may be extended. For a first-time bankrupt with high surplus income, the automatic discharge period may extend to 21 months. For a second-time bankrupt with surplus income, the period extends to 36 months.
Here’s a summary of these timeframes:
| Automatic Discharge Period | No Surplus Income | Surplus Income |
|---|---|---|
| First Time Bankrupt | 9 months | 21 months |
| Second Time Bankrupt | 24 months | 36 months |
Ineligibility for Automatic Discharge
There are reasons why you may not receive an automatic discharge. The most common one is the failure to complete your duties. If you neglect your duties or a creditor opposes your discharge, you need to go to court and justify your actions.
Tip: Complete your duties! If you face difficulties, communicate with your trustee immediately.
Types of Debts Not Covered by Bankruptcy Discharge
Certain types of debts exist that are not covered by the bankruptcy discharge. These include support payments to ex-spouses or children, fines imposed by the Court, debts resulting from fraud, and student loans if less than seven years have passed since you ceased to be a student.
Conditions for Automatic Discharge
There are certain conditions you need to fulfill to be eligible for automatic discharge. These include attending two financial counselling sessions, and not being required to pay a portion of your income into the bankruptcy estate as per the standards established by the Office of the Superintendent of Bankruptcy (OSB).
Challenging the Bankruptcy Discharge
Your discharge may be challenged by creditors, the Licensed Insolvency Trustee (LIT), or the BIA if you fail to fulfill your obligations or commit an act of misconduct. The Court then reviews the opposition and makes a decision.
Types of Discharge
There are four types of discharge:
- Absolute discharge.
- Conditional discharge.
- Suspended discharge.
- Refused discharge.
Consequences of Not Being Discharged
Not being discharged can have serious implications. For instance, a person who is bankrupt may not borrow more than $1,000 without informing the lender about their bankruptcy status. This is a serious offense under the BIA, liable to fine, imprisonment, or both.
Impact on Credit File
Information related to bankruptcy stays on an individual’s credit file for 6-7 years after the discharge of a first-time bankrupt. The duration may vary across provinces/territories.
Seek Professional Advice
If you are contemplating filing for bankruptcy, it is advisable to contact a bankruptcy trustee near you. They can provide answers to your questions about how long you will be bankrupt and your bankruptcy discharge.
Summary
The Alberta Bankruptcy Discharge is an essential step in eliminating your debts. The duration of bankruptcy is influenced by factors such as bankruptcy history, surplus income, and eligibility for automatic discharge. It is crucial to fulfill your duties and seek professional advice to navigate this complex process smoothly.
In the end, remember that bankruptcy is a serious legal process, and it should not be taken lightly. It’s crucial to understand the process thoroughly, and seeking professional advice is always recommended.
