How Do I Get Discharged from Bankruptcy in Ontario?

| Category: Bankruptcy FAQ | Bankruptcy in Ontario
Category: Bankruptcy FAQ | Bankruptcy in Ontario | (36) 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.

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  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
      1. James

        Regarding your link to find and recover a letter of discharge of a bankruptcy. That link doesn’t go to any information regarding retrieval of the letter. I tried search terms but only found items related to corporate bankruptcy. Could you post an updated link please?

        Reply
        1. Ted Michalos, Bankruptcy Trustee

          I just tested both links and they work. The first link is so that you can search the government’s database to find out who your trustee was. Once you know the trustee you may contact them to reproduce your Certificate. The second link is simply to allow you to contact the government agency that deals with this directly, if the trustee can’t or won’t assist you.

          Reply
  4. sarah

    I went to claim brankrupcty in ontario in 2008. Without to much of a story I was in a bad state and in and out of the hospital. So long story short I went to get a bank loan last week and they asked about a brankrupcty in 2008 which shouldn’t have been there still. So I contacted my trustee and they advised me that I didn’t finish my branruptcy and that I owed 150.00 and needed my 2002 taxes.
    Can they still hold this brankrupcty against me if it was so long ago and I didn’t finish the conditions?
    I went ahead and paid the 150.00 and I’m now waiting for my taxes to come from the cra. Do I have any options?
    Thank you

    Reply
    1. Ted Michalos, Bankruptcy Trustee

      Unfortunately, if you didn’t complete all of your required duties (like payments and filing of tax returns) you cannot be discharged from bankruptcy. There is no time limit or Statute of Limitations – you remain an undischarged bankrupt until you complete your duties. You have the right to apply directly to the Court and a judge has the ability to grant your Discharge, but usually the first question the judge asks is “Have you completed all of your duties?” Sorry, but that’s how the system works…

      Reply
  5. Laura

    Ar the time of pleading bankruptcy my budget was presented to my trustee showing no Money left after payment of rent, car loan, utilities etc. the trustee looked for a way to free up income and could not find any. I called the Superintendent of Bankruptcy who advised the trustee has to request mediation. They did so just before discharge, but I was hospitalized for three weeks so missed the date.
    How can surplus payments be made when obligations do not free up the surplus required?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Laura. Surplus income is based on your income, not your expenses. The limits are set by the government, and they are the same, whether you live in an expensive apartment in Toronto, or a less expensive town. In the situation you describe, you were not able to pay the surplus income requirements. When that happens, the trustee (or you) can request mediation to allow you and the trustee to determine if there is a way to complete the payments. One option is to extend the time period of the bankruptcy so you can make the payments. If you don’t attend mediation, a court hearing is generally the next step, at which point you can explain to the bankruptcy judge your situation, and they can determine what is required to complete your bankruptcy. Regardless, this is something you should immediately discuss with your trustee, as only your trustee is aware of the full facts of your file.

      Reply
  6. Sandra E.

    I received an unconditional discharged in May of 2015 however I recently got my credit report and a debt that I included in my bankruptcy still shows up. My ex husband was to have had my name removed from this debt because it was included.

    It shows that the account was closed early in the summer and then reopened again this fall. It shows that it was included in my bankruptcy but still shows my name on it. Will it continue to affect my credit as I rebuild?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Sandra. It is strange that a debt that was included in your bankruptcy and was closed was then reopened. Yes, a debt on your credit report will impact your credit score, so as a starting point you should contact the bank and ask why a debt that was closed and no longer exists is now reappearing on your credit report.

      Reply
  7. Chad

    I claimed bankruptcy in 2000 but I still have not been discharged. How long is the statute of limitations before it will be removed from my credit report thanks for any info

    Reply
    1. J. Douglas Hoyes, Trustee

      Generally bankruptcy information is removed from your credit report after six years for a first bankruptcy. However, that is six years from the date of discharge, so since you are not discharged it will be up to the credit reporting agency to determine when the bankruptcy should be purged.

      Reply
  8. Frances

    I paid out the amount the trustee wanted me to pay. The caution on my home as been removed. I am waiting to be discharged but they have not told me how long it will be or if I have a court date yet. How long does it take to get a date from the court.
    Thanks

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Frances. How long it takes to get a court date depends on how long the back log is in your particular court district (London, Toronto, Ottawa, etc.). It can take up to a year or more in some cases. You should ask your trustee for their best estimate of when your court hearing may be.

      Reply
  9. jen

    I received and absolute discharge in sept 2015. no surplus. Do i keep my 2015 tax refund? If not i dont understand because being discharged means i have no further money owed to anyone, all money to my trustee was paid. So what are they gonna do with my refund then? where does that money go? thanks -Jen

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Jen. You lose your tax refund for the year of bankruptcy, so if you went bankrupt in 2014, and were discharged in 2015, then you would receive your 2015 tax refund. Your trustee can explain the process in more detail.

      Reply
  10. Andrew S.

    How long does it take to book a discharge hearing…my original trustee should be sued for malpractice, if that’s even possible, and I have had to hire a bankruptcy lawyer to get me discharged I have been bankrupt since 2008 with no resolution. I have retained him but every time I ask his if we have a date yet he tells me no. At this point I am wondering whats going on…he was to look into this back December and now its March and still no hearing date. I know that generally hearings are generally a long way off but should we not have at least a date yet?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Andrew. Without knowing the particulars of your case I can’t give a detailed comment. I can tell you that it is not unusual for it to take up to a year to get a discharge hearing in Toronto court. All I can suggest is that you continue to touch base with your lawyer to see where they are at.

      Reply
  11. Mike

    I have 2 questions:
    1) If I sell my house before I’m discharged but the closing date is after I’m discharged, do I owe any of my profits to the creditors?

    2) If I owe surplus when I reach my discharge date, I know that I keep making payments until my debt if fully paid and then I get discharged. The question is, do I owe surplus on income earned after my original discharge date to the actual discharge date?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Mike. These are complicated questions, and depend on many factors, so you should discuss these questions with your trustee.

      The house equity date will be determined between you and your trustee. Surplus income continues during the period of the bankruptcy, but again there are many nuances to this calculation, so you should discuss your specific situation with your trustee.

      Reply
  12. Cahill

    My assignment was filed on June16, 2015, and to the best of my knowledge, I completed all of my bankruptcy duties (submitted final history & debt info, submitted monthly income/expense statements, attended 2 counseling sessions, supplied T4s for 2014 & 2015). My bankruptcy was 9 months because it is my first bankruptcy and I had no surplus income. Therefore I think my discharge date was March 16, 2016.

    My question is, if I get an automatic discharge, roughly HOW MANY DAYS DOES IT TYPICALLY TAKE A LICENSED INSOLVENCY TRUSTEE TO GET MY DISCHARGE PAPERS? How soon after does a trustee send the discharge papers to clients? I need my discharge papers ASAP because one of my debts was a 407 debt and I want to get my car back on the road ASAP for seasonal employment reasons.

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Cahill. This is a question you should ask your trustee, since each trustee is different. At our firm we issue automatic discharge papers very quickly, generally within two weeks of the automatic discharge date, but that time period can be shorter or longer depending on the time of year, whether or not all payments have cleared the bank, and other factors. If you have an urgent need for your discharge papers you should contact your trustee and ask them to issue them as quickly as possible.

      Reply
  13. Denise

    I am 63 receiving ODSP, I earn $600 a month from a part time job in an office. My daughter and I cohabit-ate and she receives ODSP and is very sick. I consolidated our debt because the financial burden and caregiving became my responsibility a year ago when my daughter’s condition worsened. I declared bankruptcy in 2005 and am fully discharged. How would I be received on a second bankruptcy and because I incorporated my daughters debts would she have to declare a first bankruptcy at the same time. How long would it take for discharge on a second bankruptcy.

    Reply
  14. Joel

    I declared Bankruptcy in 2006.. I never received my discharge papers because I never completed my duties.. It’s now 2016 and this is all starting to catch up with me. When I went to do my income taxes I ended up owing CRA over $1300. That debt is now paid off, but they are holding my refund for 2015 due to my bankruptcy. I called the trustee (first time we spoke since 2006) and he said that I must pay $4000 to get my discharge papers.. Which doesn’t make sense to me. This was 10 years ago. I just want to move on from this, will this ever go away? I don’t want to pay the $4000.. It’s not something I can afford. Please, is there any alternatives that I can pursue to make this go away?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Joel. Without knowing your full situation it is impossible to answer your question. It would appear that you didn’t complete your duties, which may have involved paying more money. Also, the trustee will have to go to court to get your discharge, so it’s not as simple as having them print a piece of paper. I would suggest talking to the trustee to get a full explanation of what’s required to get your discharge. Another option is to hire a lawyer to go to court and apply for your discharge, but in most cases that’s more expensive than dealing with your original trustee.

      Reply
  15. Ed

    Hi,
    I filed for bankruptcy in 2005 but did not attend my discharge hearing so I am still listed as undischarged and my former trustee wants a fee to reopen my file that I just cannot afford at this time.

    I read in one of the comments above that it is possible to go before a judge on your own to apply for a discharge, unfortunately their isn’t much information online as to what steps I would need to take, do you have a link or anything to point me in the right direction?

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Ed. You are correct, there is no guidebook for how to obtain your own discharge, because it’s a very rare occurrence. If you want to attempt it yourself, you would need to contact the bankruptcy court in your jurisdiction, and ask the court clerk to tell you what forms you will need to file with the court. You will also need to notify all creditors, and the trustee, that you are applying for your own discharge, and you must provide an affidavit to the court that all parties have been notified.

      At the court hearing you will have to convince the court that you should be granted your discharge. Presumably you were not discharged originally because some of your duties were outstanding, including perhaps making payments to the trustee, so you will have to provide evidence to the court that you have completed your duties and paid all costs.

      Alternatively you could hire a lawyer to represent you.

      Either alternative is probably more expensive and time consuming than having your original trustee complete the process, but the decision is up to you.

      Reply
  16. william

    hello
    i filled for bankruptcy 2 years ago. one of the people i owed money to apposed the discharge and we had to go to court. at the end of our time in court the judge said that we would get the verdict in the mail. it has been 4 months since we had court and we have not heard anything from the court. we have kept in contact with our trustee and she claims she has not heard anything from the court either.

    i was wondering how long we could be waiting for a verdict from the judge. and what could possible take them this long to render the verdict.

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi William. In the Toronto bankruptcy court it can take a long time to receive the judge’s decision. I would suggest that you continue to do what you are doing: call your trustee once a month and see if they have heard anything from the court. After six months your trustee should contact the court, just in case the documents were “lost in the mail”.

      Reply
  17. Melissa

    Hi,
    My husband went bankrupt before we met, in 2007. (his first and only bankruptcy). He never completed his duties. I contacted his trustee my self in April of 2016, she informed me of the amount he owed, and he had 1 counselling session to complete. I sent a cheque for the amount he owed and she received it May 1 2016 (it was cashed and went through the account). He also signed the papers for his last counselling session, so he has completed his duties. She told me it can take between 4-6 months to get a court date to be discharged from Toronto. He lived in Peterborough, ON at the time and now we live near Ottawa, ON, could they not give us a hearing closer to home? She told me they couldn’t, it had to be in Toronto, ON and we had to be present for the court date in case the judge has any questions? Is that correct?
    Also, I did a credit report on him, and Equifax has deleted his bankruptcy from their files, but Transunion still has it showing on his credit report as “Hearing Adjourned”. Once he gets discharged hopefully in the next couple months, would Transunion remove it sooner than having to wait an additional 7 years??
    Thanks

    Reply
    1. J. Douglas Hoyes, Trustee

      Hi Melissa. I can only give a general answer since I’m not familiar with the specifics of your husband’s file, but in general yes, what the trustee has told you appears to be accurate. It does take time to get a court hearing in Toronto, and the court hearing generally is held in the jurisdiction where the bankruptcy happened, not where you are currently living.

      Generally TransUnion removes a bankruptcy 7 years after discharge, so it is likely that the seven year time frame will start once he receives his official discharge.

      Reply

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