Learn More About the Bankruptcy Discharge
Bankruptcy discharge means eliminating your debts.
It offers you a clean slate, with some conditions, and allows you to remove the burden of debts that are weighing you down.
The discharge process is not too complicated, but there are a few things that you should be aware of when filing for bankruptcy.
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Which Debts Are Discharged?
Not all debts are discharged when you file bankruptcy, but most unsecured debts are included.
Some of the debts that won’t be discharged include secured debts, student loans that are less than seven years old, and legal fines, as well as spousal and child support payments.
Unsecured debts that might be cleared include credit card debt, lines of credit, personal loans, payday loans, utility bills, retail store accounts, and medical bills.
Some secured debts might be discharged, but some might not.
In order for your debts to be discharged, you must fulfill certain duties after filing bankruptcy.
Your trustee will make sure that you understand what your duties are and that you complete them.
Your duties include attending two credit counselling sessions and making a monthly payment to your trustee, who will use it to cover the administrative costs of the bankruptcy.
You might also be required to make surplus income payments if your income is over the threshold set for the year and for the size of your family.
Each month, you will need to send proof of your income to your trustee.
This will be used to calculate how much you need to pay that month.
If you make payments to an ex-spouse or child support payments, you can also provide evidence of these to have your net income calculation reduced.
Your trustee will explain your duties and responsibilities so that you can understand what you need to do and carry out the correct actions.
What Can Prevent Discharge?
There are some things that might prevent you from being discharged from your debts.
If you don’t complete your duties, you won’t be able to be discharged.
Another reason you might not receive your discharge is if a creditor objects to the discharge.
This might happen if a creditor thinks that you haven’t behaved appropriately.
They can ask the bankruptcy judge to delay your discharge or not grant it at all.
However, this is very rare and isn’t usually something that you need to worry about.
What Happens After Your Discharge?
After you have received your discharge, you will be debt-free, apart from any debts you might have that are not included in the discharge.
The discharge will remain on your credit report for a number of years, usually six years for a first bankruptcy.
Bankruptcy can allow you to have a fresh start, and you can start to save money and rebuild your credit.
For more help with the bankruptcy process, take a look at our other resources to learn about how everything works.
Get in touch with a local Licensed Insolvency Trustee for more advice and information on bankruptcy and debt solutions.
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?