Most unsecured debts are discharged at the end of your bankruptcy. Unsecured debts that are discharged include credit cards, bank loans, lines of credit, pay day loans, and taxes.
Secured debts, such as car loans and mortgages on a house, are not discharged unless you surrender the asset (the house or car) at the start of the bankruptcy. For more information about these situations read our FAQ’s about what happens to your house in a bankruptcy and can you keep you car in a bankruptcy.
Debts that are not discharged when you go bankrupt in Ontario include:
- Student loans less than 7 years old;
- Alimony and child support;
- Fines and most court ordered restitution payments;
- Debts that arose as a result of fraud;
- Certain government over-payments (this is a complicated area, so if you have received over-payments from the government for unemployment insurance or child tax credits, you should discuss this with your Ontario bankruptcy trustee).
Determining whether or not a debt is discharged in a bankruptcy can be complicated, and the rules can change as a result of court rulings, so it is essential that you review all of your debts with a licensed trustee prior to filing for personal bankruptcy in Ontario.
Book a free initial consultation with an Ontario bankruptcy trustee for more information on whether or not your debts will be discharged in a bankruptcy in Ontario.