What Happens if I Don’t Fulfill My Duties During A Bankruptcy?
If you have not completed any of your duties, your Trustee will be forced to oppose your discharge. Without your discharge, your debts will still exist and your creditors can pursue you for collection just as though you never filed bankruptcy.
Receiving a fresh financial start is your right as a Canadian. Often, filing bankruptcy is the way to get this fresh financial start.
Bankruptcy is regulated by the Office of the Superintendent of Bankruptcy Canada (OSB) and you must used a Licensed Insolvency Trustee.
The bankruptcy process is regulated by the BIA (Bankruptcy and Insolvency Act).
By filing bankruptcy you can have most, or even all, of your debts eliminated. In exchange for this fresh financial start, you must complete certain duties as a bankrupt.
These duties will be explained in full to you by the Trustee before you proceed with filing for bankruptcy.
The bankrupt’s duties include, but are not limited to:
Disclosing their property to the Trustee;
Turning over all non-exempt property to the Trustee;
Turning over all credit cards to your Trustee so they can be cancelled (you cannot keep a credit card while bankrupt);
Providing the Trustee with financial statements;
Provide the Trustee with a report on your income and expenses;
Advise the Trustee of your new address if you move during the bankruptcy;
Attend two financial counselling sessions;
Attend the meeting of creditors, if requested (which is very rare for a personal bankruptcy).
Preparing a 170 Report
Before a bankrupt can receive their discharge from bankruptcy their Trustee will prepare a “170 report.” This report, also known as a “Report of Trustee on Bankrupt’s Application for Discharge”, will include the Trustee’s comments on whether or not you have successfully completed the duties imposed on you.
Consequences of Not Fulfilling Your Duties
Often, a bankrupt’s discharge is opposed due to failure to pay the required surplus income payments, which is one of the main duties.
Completing all of your duties in a timely manner is the best way to get the most out of your fresh financial start.
If you do not complete your duties you will remain an undischarged bankrupt. As an undischarged bankrupt your debts will still exist and you will not be able to file another bankruptcy.