Bankruptcy Step 9: You attend the discharge hearing
- Introduction to bankruptcy in Canada
- Step 1 - Contact a trustee in bankruptcy
- Step 2 - Complete bankruptcy forms
- Step 3 - Trustee sells your assets
- Step 4 - Trustee notifies your creditors
- Step 5 - Creditors meetings if required...
- Step 6 - Examination by an officer of the OSB if required...
- Step 7 - You are required to attend two counselling sessions
- Step 8 - Trustee prepares your report to the OSB
- Step 9 - You attend a discharge hearing if required...
- Step 10 - You are discharged from bankruptcy
- The student loans hardship provision
Attend discharge Hearing
Step 9: You attend the discharge hearing, if required.
You will be automatically discharged nine months after filing for bankruptcy if the following conditions are met:
- this is your first bankruptcy;
- your discharge is not opposed by the Office of the Superintendent of Bankruptcy, the trustee or a creditor;
- you have not refused or neglected to receive counselling; and
- you are not required to pay a portion of your surplus income into the bankruptcy estate as per the standard established by the OSB.
If you are required to make payments from your surplus income, you will be eligible for an automatic discharge after contributing part of the surplus to your estate for 21 months.
For a second bankruptcy, if payments from surplus income are not required, automatic discharge takes place 24 months after the date of the bankruptcy. Second-time bankrupts with surplus income, however, are required to contribute part of the surplus to their estate for 36 months, after which they are eligible for an automatic discharge.
If you are granted an automatic discharge, there is no Court hearing and the trustee sends you a copy of the discharge.
For those who do not qualify for an automatic discharge, the trustee will apply to the Court for an appointment to hear the application for discharge.
At the hearing, the trustee's report is used to inform the Court of the circumstances surrounding your bankruptcy.
The Court will choose one of the following discharge alternatives:
- Absolute discharge - With an absolute discharge you will be released from the obligation to repay the debts you had as of the date your bankruptcy was filed, except for certain types of debts that are excluded (see Step 10).
- Conditional discharge - A conditional discharge requires that you fulfill certain conditions prior to obtaining your absolute discharge. Typically, you will be required to pay a certain amount of money, possibly over time. However, the Court may impose other types of conditions as well. Once the conditions are met, an absolute discharge will be granted.
- Suspended discharge - A suspended discharge is an absolute discharge that does not take effect until a future date.
- Discharge refused -The Court has the right to refuse a discharge.
