Can I Pay an Ontario Bankruptcy Off Early?

Accelerating the Payment of an Ontario Bankruptcy: Is It Possible?

Pondering over the question, “Can I Pay an Ontario Bankruptcy Off Early?” may lead you down a complex path. The answer isn’t straightforward and depends on a myriad of factors. This article will take you through the ins and outs of this topic, providing a clear understanding of the possibilities and procedures involved.

Bankruptcy Timeline in Ontario

Before diving into the possibilities of early payment, it’s essential to understand the standard timeline of bankruptcy in Ontario. The timeline can extend up to 21 months if a person has a surplus income over $200, which is beyond the limit. Consequently, their bankruptcy is extended for an additional 12 months. But can you help a friend or a relative pay off their bankruptcy early? Let’s explore.

Approaching the Early Discharge: Two Possibilities

There are two potential routes to achieving early discharge from bankruptcy in Ontario. However, the success of these options highly depends on the unique circumstances of the bankrupt individual.

Option 1: Making Required Payments to the Trustee

The first approach involves making the necessary payments to the trustee. After paying the required amount, the trustee or the bankrupt person can apply to the bankruptcy court for an early discharge. But here’s the catch – it’s entirely up to the court to decide whether to grant it or not.

According to Section 169 [2] of the Bankruptcy & Insolvency Act, an application for discharge can be made no earlier than three months and no later than one year after the start of bankruptcy. So, in theory, an early discharge is possible. However, the court might argue that the bankrupt individual should not only pay the money but also remain bankrupt for the additional 12 months. Thus, the court may deny the early discharge.

Option 2: Filing a Consumer Proposal

The second option involves filing a consumer proposal. The bankrupt individual could propose to immediately pay the creditors the balance of the amount that would have otherwise been paid in the bankruptcy, perhaps even a bit more. The creditors might agree to this proposal as they would receive their money quicker, without waiting for the 21-month bankruptcy term to end.

Seeking Expert Advice

Regardless of the option you choose, it is crucial to consult with a trustee who can best advise on the likely success of each potential approach. They can provide expert insight into the unique situation and offer guidance tailored to the individual’s financial circumstances.


When asking yourself, “Can I Pay an Ontario Bankruptcy Off Early?”, remember that the answer isn’t simple. Paying off a bankruptcy early in Ontario is legally possible, but its success depends on several factors, including surplus income, the bankruptcy timeline, and the court’s decision. Whether you opt to make payments to the trustee or file a consumer proposal, professional advice from a trustee is indispensable to navigate the complex bankruptcy landscape in Ontario.

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