How Do I Get Discharged from Bankruptcy in Ontario?

| Category: Bankruptcy FAQ | Bankruptcy in Ontario
Category: Bankruptcy FAQ | Bankruptcy in Ontario | (4) comments

Your discharge is important because it is your discharge that eliminates your debts, except those debts not discharged by a bankruptcy.

Automatic Discharge

bankruptcy dischargeYou will receive an automatic discharge from a first or second bankruptcy if you:

  • complete all of your duties and
  • your trustee and your creditors do not object to your discharge.

The length of your bankruptcy in Ontario can be as short as 9 months if this is your first bankruptcy and you have no surplus income but will be extended if you have surplus income or have been bankrupt before. For more information, read our FAQ about how long you will be bankrupt in Ontario.

An “automatic discharge” means that the court is not involved. Once you receive your automatic discharge, your obligation to repay your debts is gone and you have a fresh start.

Court Hearing And Discharge

While most bankruptcies end in an automatic discharge, there are circumstances when the courts will be required to approve your discharge. You are not eligible for an automatic discharge and court hearing is required if:

  • You do not complete your duties,
  • any of your creditors or your trustee objects to your discharge, or
  • if this is your third bankruptcy.

In bankruptcy court the bankruptcy judge will determine what actions you are required to take to receive your discharge.

There are four types of discharge that the judge can order:

  • Absolute discharge — You will be fully released from your debts, except debts that are excluded by bankruptcy law.
  • Conditional discharge — You are required to fulfill certain conditions prior to obtaining your absolute discharge. Conditions may include making additional payments, or completing your duties.  Once you have completed the conditions, the trustee must return to court to obtain your absolute order of discharge.
  • Suspended discharge — This is an absolute discharge that does not take effect until a specific date in the future.
  • Discharge refused —The court may refuse a discharge.

As mentioned earlier, you bankruptcy discharge is important because it is your discharge that eliminates your debts.  If you do not receive your discharge, your trustee is required to close your file, and at that time all of your debts return.  You are then in the worst possible position: your creditors can pursue you for the amounts owing, but because you are an undischarged bankrupt you cannot go bankrupt to eliminate your debts.

If you are thinking of filing for bankruptcy, contact an Ontario Bankruptcy Trustee about your situation. We can explain what your discharge will mean and help you through the process.

Leave A Comment

  1. Chris

    What are your options when your conditional discharge is to pay your surplus oweing but you lose your high paying job?

    Reply
  2. J. Douglas Hoyes, Trustee

    Chris: Assuming the conditional discharge is pursuant to a court order, only the court can change the terms of a conditional order, so your only option would be to return to court to request a variance to the initial order. This is something you should discuss with your trustee.

    Reply
  3. Rusty M.

    I declared bankruptcy 20 years ago and lost my discharge certificate. Where can I get a copy, and, is this bankruptcy still listed, and do I have to state on forms that I declared bankruptcy 20 years ago. I am applying for a real estate license and the are asking if I had ever declared bankruptcy.

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Rusty. Bankruptcy information is maintained on your credit report for six years after discharge, so if your bankruptcy ended 20 years ago it won’t be on your credit report.

      However, bankruptcy information going back to 1973 does appear on the government’s website: https://www.ic.gc.ca/app/scr/bsf-osb/ins/login.html?lang=eng so if anyone wanted to pay $8 to search your name, they could find out you were bankrupt. To answer your question, it’s up to you how you answer the question on your real estate license application. The correct answer is yes, I declared bankruptcy 20 years ago, but I am discharged.

      To get a copy of your discharge certificate you would need to contact your original trustee. If they can’t produce it, you could contact the Office of the Superintendent of Bankruptcy and they could retrieve it from their archives. Their address can be found here: https://www.ic.gc.ca/eic/site/icgc.nsf/eng/h_07026.html#from=Bankruptcy

      Reply

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