Yes, it is possible for a bankruptcy trustee to oppose your bankruptcy discharge. Your discharge could also be opposed by either a creditor or the Superintendent of Bankruptcy.
Most oppositions to a bankruptcy discharge in Ontario happen because the bankrupt did not complete their required duties. In fact, the trustee has an obligation to oppose the discharge if you do not do all that is required under the Bankruptcy and Insolvency Act. Although you may have originally sought out the services of a trustee in bankruptcy at the start of a bankruptcy process, it’s important to remember that the trustee is appointed to ensure the rules of the bankruptcy are fairly followed by all parties involved.
At the onset of filing a bankruptcy, the trustee will advise you of what duties you are required to do during a bankruptcy and will have you sign to acknowledge you understand your responsibilities. If the trustee subsequently opposes your discharge, it is likely because you either:
- Did not disclose information pertaining to your assets or monthly income during the bankruptcy
- Did not pay the required amount of surplus income
- You refused or neglected to attend the two required credit counselling sessions
The above list is not exhaustive but would be the most common. Other reasons for an opposition to your discharge could include:
- You chose to file a bankruptcy when a viable proposal could have been offered
- You had unusual or excessive transactions prior to filing the bankruptcy
- You caused your bankruptcy by gambling
- You did not attend a creditors meeting or examination (if one was required).
- It’s your 3rd (or more) time of filing a bankruptcy
Although it’s not an opposition, a court hearing would also be required in a bankruptcy if more than 75% of your debt is a $200,000 (or more) debt owing to CRA.
If you bankruptcy is opposed by your trustee, you will be required to attend a court hearing to explain to the bankruptcy judge (or registrar) why you had not done one (or more) of the required duties. The court will then determine the outcome of your discharge. A discharge can be:
- Refused (meaning you remain bankrupt)
- Suspended (your discharge is granted for a future date)
- Granted Conditionally (you have to finish a duty or payment to be granted the discharge)
- Give Absolutely (you’re discharged and no longer responsible for your debts
Your discharge hearing can also be adjourned. If there’s information required by the court, the court can adjourn the hearing for your application for the discharge to a later date to allow you more time to complete the required duty.
If you don’t attend the discharge hearing, the court could allow the trustee to apply for a discharge of the trustee only, meaning you remain bankrupt until you complete the duties required but you lose the bankruptcy protection. If this happens your creditors’ rights are essentially re-instated and they can pursue you for the debts again.
It’s important that you don’t rush into filing a bankruptcy without understanding what’s required of you. If this is your first or second bankruptcy, and you complete all your duties and payments in the required time frames and the creditors and OSB don’t oppose your discharge you’ll be eligible for an Automatic Discharge from bankruptcy without having to go to court. This is the best approach to completing your bankruptcy as quickly as possible and getting your life back on track.
My Husband and I filed back in 2006 and we as far as we remember we did everything we needed to do, but finish paying our surplus, in 2020 we contacted our trustee to make arrangements to complete our discharge and get things back on track, was told to pay $750.00 for bring up our files now they want every tax filed from 2008 to present, I don’t want to start from the beginning again we just want it over, plus my husband quit his job and asked for a payout of his pension plan and they said he couldn’t have it. We knew he couldn’t touch his RRSP amount but can they hold all of it or just a the amount he had at time of bankruptcy. Can you please help
When you failed to complete the procedure back in 2006 you locked yourself in financial limbo as “undischarged bankrupts”. While under the bankruptcy rules you are subject to something called “after acquired property” which requires your trustee to look to see how you have faired since filing. Your trustee may be looking at tax returns to determine if you owe any surplus income – if they are then that is not appropriate. You are subject to surplus for the 21 months as a first time bankrupt (36 if this was a second filing). They still have a right to look at your tax returns to determine how well off you have been. If things have improved for you then the Court may order some sort of additional payment. Your best bet may be to speak to an insolvency lawyer – someone specifically hired to look after your best interests and to try and “bend” the law to your advantage. Think of your trustee as a referee – applying the rules equally for all involved. In the end, a judge will decide what is “fair” in your case.