Requirements to Receive Your Bankruptcy Discharge in Canada
The bankruptcy discharge process in Canada can take between nine and 36 months, depending on a number of factors, such as whether it is a first or second bankruptcy.
There are several steps that must be followed in order to complete the duties required from you after filing for bankruptcy.
Understanding these steps is part of the process, and your Licensed Insolvency Trustee can help you to navigate these important steps.
By following the necessary steps, you can have your bankruptcy discharge complete as soon as possible.
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Your Trustee Can Approve or Deny Your Bankruptcy Discharge
A Licensed Insolvency Trustee in Canada is an officer of the Bankruptcy Court, which means that they have a duty to inform the Office of the Superintendent of Bankruptcy (OSB) if there is any reason that your application to be discharged from your bankruptcy should not be approved.
It’s important that you do not do anything that could put your application at risk, such as suddenly taking on a new debt.
Requirements for a First Time Bankruptcy
An automatic discharge means that your bankruptcy will be discharged without the need for a court hearing.
You will receive a discharge certificate from your trustee to confirm the discharge.
There are different requirements for an automatic discharge, depending on if it is your first bankruptcy or second bankruptcy, as well as some other factors.
A first time bankruptcy can be approved for an automatic discharge in as few as nine months if you meet the requirements.
For this to happen, there needs to be no opposition to your discharge from your trustee, any creditors, or the OSB.
You must also attend financial counselling sessions, and you must not have been required to pay surplus income into your estate.
If you are required to pay surplus income into your estate, you can still receive an automatic discharge if you make your surplus income payments as required.
Requirements for a Second Bankruptcy
A second bankruptcy allows for an automatic discharge after 24 months if no surplus income payments are required or after 36 months if they are required.
The other conditions required for a first time bankruptcy must also be met.
Keeping Your Discharge Certificate
The paperwork that you receive once your discharge is complete is important to keep in a safe place.
You can use it to prove that you are no longer going through bankruptcy, and you may need it if you are applying for credit or need proof of your discharge for other reasons.
It can be helpful to have if the bankruptcy is later not removed from your credit report when it should be, for example.
You should keep it in the years after your discharge, preferably at least until your bankruptcy no longer shows on your credit report.
When the Bankruptcy Court Gets Involved
An automatic discharge is not always granted.
When this happens, the Bankruptcy Court will examine your situation and make a decision.
They might grant a discharge of your bankruptcy in one of three ways, or they can also refuse a discharge.
- An absolute discharge releases you from your debts with no further conditions;
- A conditional discharge requires you to meet certain conditions set out by the Court, after which you will be given an absolute discharge;
- A suspended discharge is set for a future date, instead of being effective immediately.
A refused discharge has consequences for a person who is bankrupt.
When you are bankrupt, you are not able to borrow more than $1,000 without telling the lender about your bankruptcy.
It is important to follow all of the duties for bankruptcy and to avoid doing anything that might put your discharge in jeopardy.
Your trustee must let the OSB know if there is any reason that your discharge can’t be approved, and the Bankruptcy Court has the right to deny or delay your discharge.
For more help with the bankruptcy discharge timeline, contact us at Bankruptcy Canada.
Our debt management services are here to help you find the right trustee and get the advice that you need to manage your debt.
You can get in touch by calling our 24/7 helpline or contact us online by filling in a simple form.
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