Several factors affect how long you will be bankrupt for in Ontario. The top four considerations:
- How many times you have been bankrupt.
- Whether or not you have surplus income.
- Whehter or not you completed your duties?
- If your trustee or any creditor objects to your discharge.
The soonest you can complete a bankruptcy is in nine months. This can happen if this is your first bankruptcy, you are not required to pay surplus income, you complete all of your duties while bankrupt, and if your trustee or your creditors to do not object to your discharge.
However, if you have significant surplus income, your bankruptcy will be extended for an additional year, meaning your bankruptcy will last 21 months.
If this is your second bankruptcy, you are automatically bankrupt for 24 months, and if you have surplus income an additional year is added, so you would be bankrupt for 36 months (3 years).
The above scenarios assume you qualify for an automatic discharge. If this is your third bankruptcy, or if your trustee or any creditor objects to your discharge, you are not eligible for an automatic discharge, and your trustee will apply to the court to approve, or make conditions for, your discharge. This is rare. Most people receive an automatic discharge in nine, 24 or 36 months depending upon the conditions above. A creditor or your trustee will object to your automatic discharge if:
- you did not complete your duties;
- your actions were considered inappropriate according to the Bankruptcy and Insolvency Act;
- this is your third bankruptcy.
Bankruptcy rules are complex. We suggest you contact a licensed Ontario bankruptcy trustee who will meet with you to explain the rules for filing bankruptcy, discuss how long you will be bankrupt for in Ontario, and help you decide whether or not a bankruptcy is the correct solution for your financial situation.
Contact an Ontario bankruptcy trustee for a free, initial consultation.