Declaring & Filing For Bankruptcy in Canada
The first time a consumer files for bankruptcy in Canada, if there is no surplus income, they will qualify to be discharged in 9 months. If the consumer has surplus income they will be discharged in 21 months.
What does it mean to be “un-discharged?” After filing for bankruptcy and until you have fulfilled your obligations in bankruptcy, you will remain an “undscharged bankrupt”.
These obligations include:
- Reporting your income to the Bankruptcy Trustee on a monthly basis.
- Making monthly payments and surplus income payments to the Trustee in Bankruptcy.
- Completing two mandatory in person, credit counselling appointments.
- Inheritances and lottery winnings go to the Trustee in Bankruptcy.
Once you are discharged from bankruptcy your obligation to the Bankruptcy Trustee and your creditors is over.
A common situation which can occur causing an individual to file for bankruptcy is often the loss of a job or inability to find work. When they return to work or their financial position dramatically improves, the Trustee will begin to demand large surplus income payments. If you cannot pay the surplus income, you will remain undischarged!
DebtCare Canada works with Canadians who struggle with debt to review all possible options before considering bankruptcy. There are other Federal Government programs that don’t involve bankruptcy that can stop collection action being taken against you and are quite effective at eliminating debt.