Bankruptcy Court and What You Should Expect

Barrie Bankruptcy Court

Since filing for bankruptcy in Canada is a legal process, as outlined by the Bankruptcy and Insolvency Act (BIA), you may be required to appear in court. In Canada, the ability to exercise the bankruptcy process falls under the provincial Superior Court’s jurisdiction. You typically would attend a hearing in a Bankruptcy Court to appeal for a discharge.

In your first or second bankruptcy, you need to:

  • Complete all of the duties required for filing for bankruptcy as outlined by your trustee
  • And if no one opposes the discharge.

Throughout the process of filing for bankruptcy, you are bound to complete certain duties – which includes attending two sessions for credit counselling. Not completing these duties is a sure-fire way to wind up in court. To add insult to injury, if you don’t complete them, you will not only have to go to court, but offer up an explanation as to why they weren’t finished.

If you are eligible, you will be given a copy of the discharge papers by your trustee. However, if you do not qualify, your trustee will have to apply for a hearing with the court to review your discharge.

In Canada, there are four types of discharges: Automatic Discharge, Order of Absolute Discharge, Order of Conditional Discharge, and Order of Suspended Bankruptcy Discharge.

An Automatic Discharge will be appointed if you have completed all of your duties on time, and there were no objections to the discharge. No court hearing is required in this case.

An Order of Absolute Discharge will officially rid you of your debts that were incurred prior to filing for bankruptcy. Exceptions are taken into consideration under the BIA.

An Order of Conditional Discharge means you will be discharged of your debt provided you meet the conditions set by the court.

An Order of Suspended Bankruptcy Charge means the court has delayed the discharge until a set date. This is typically due to an opposition to the discharge on the grounds of a criminal investigation, or failure in completing any and all duties.

Don’t place all of your worries on the notion that your creditor will oppose your discharge. In fact, an opposition occurs less than 1 out of 100 bankruptcies filed in Canada. A creditor would really only oppose the discharge if they believe they can convince the court to require you to make extra payments, or perform extra duties – however, this is a rarity due to the fact that your duties are laid out in the BIA.

You should note that on your third bankruptcy (and fingers crossed you don’t come to that), you will not be eligible for an automatic discharge. You will now have to go to bankruptcy court for a discharge hearing in any of the other three categories.

If you have any questions regarding bankruptcy, debt or help handling your personal finances, give us a call toll free at 1-888-504-1511, or visit us on the web at www.allentrustee.ca.

Comments are closed.