One of the most common questions people have when filing for bankruptcy is, can a bankruptcy trustee oppose my discharge?
The short answer is, yes, they can, which may be a problem for you.
Usually, your discharge will be opposed because you did not meet all of your obligations in the bankruptcy and you did not carry out all of the duties that are required of you during the process.
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The trustee is there to ensure that the rules of bankruptcy are followed by everybody involved and the Bankruptcy and Insolvency Act obligates them to oppose your discharge if they believe that your obligations have not been met.
Why Might Your Trustee Oppose Your Discharge?
There are a lot of different reasons why your trustee may oppose your discharge, but often, it is for similar reasons.
If the trustee opposes your discharge, it is likely because you did not meet some of your responsibilities.
Common reasons include:
- Failing to disclose important information about your assets or monthly income.
- Failing to pay the required amount of surplus income.
- Missing the two mandatory credit counselling sessions.
Those are the most common reasons for an opposition, but there are other circumstances in which your trustee will oppose your discharge.
These include:
- Filing bankruptcy when other alternatives were available, like a consumer proposal.
- Unusual financial activity, like large transactions, before filing for bankruptcy.
- Failing to attend your creditor’s meeting (if required).
- Filing for bankruptcy due to gambling debts.
- It’s your 3rd time (or more) filing for bankruptcy.
You may also be required to attend a court hearing if more than 75% of the debt consists of at least $200,000 owed to a CRA.
Although not technically an opposition, this may slow down the progress of your bankruptcy.
So, that answers the question, can a bankruptcy trustee oppose my discharge, but you may be wondering what happens if they do.
What Happens Next?
If your bankruptcy trustee opposes your discharge, you will need to attend a court hearing and explain to the bankruptcy judge why you did not meet one or more of your obligations.
They will then assess your case and decide how to proceed.
There are a number of potential outcomes, including:
- Refusal of the discharge, so you remain bankrupt.
- Suspension of the discharge, so it is granted for a date in the future.
- Granted conditionally, meaning that you must finish a payment or fulfill certain obligations before the discharge is granted.
- Give absolutely, meaning that you are released from your debts with no conditions.
In some cases, your discharge hearing may be adjourned because the court feels that they need more information or you require more time to meet your obligations.
If you miss the hearing, the trustee is allowed to apply for a discharge of the trustee only.
In this case, you will remain bankrupt but you no longer have bankruptcy protection.
This means that your creditors are allowed to continue pursuing you for the debt until you complete all of the duties required of you.
If you are considering bankruptcy and you are concerned about your trustee opposing your bankruptcy charge, we can provide you with all of the information that you need and talk you through the process.
Get in touch today to learn more about bankruptcy and some of the alternative debt relief options that are available.
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