How Long Will I Be in Bankruptcy?
Length of Bankruptcy
The length of bankruptcy in Canada depends on several factors.
Your bankruptcy case is over when you receive your discharge from bankruptcy, and the timing of this discharge will depend on things such as whether you were bankrupt before or if you have surplus income payments to make, which also extends the length of your bankruptcy.
Most bankrupts receive their discharge after the minimum 9 month period.
What Factors Extend The Length of Bankruptcy in Canada?
There are several factors that could extend the length of your bankruptcy that we will examine in further detail:
Have You Been Bankrupt Before?
Only first time bankrupts are eligible for an automatic discharge after 9 months, so if you are filing bankruptcy a second or third time you won’t be eligible for a 9 month discharge whether you have surplus income or not.
A second time bankruptcy will result in an automatic discharge in 24 months if you don’t have surplus income or 36 months if you do have surplus income.
Do You Have Surplus Income Payments To Make?
If you have income that is higher than limits set by the government your bankruptcy will be extended by 12 months. The larger your family, the more you are allowed to make before you are required to make surplus income payments.
If you are a first time bankrupt with required surplus income payments based on your income then your bankruptcy will be extended from 9 months to 21 months.
If you are a second time bankruptcy with surplus income payments required then your bankruptcy will be extended to 36 months, or three years.
Have You Completed All of Your Bankruptcy Duties?
You will not receive your discharge until you have completed all of your duties required of a bankrupt person.
These duties are simple to complete and the trustee will provide you assistance in completing these duties.
If you have not completed all of these duties you will not receive your discharge from bankruptcy until you have completed all of your duties. The duties you must complete include such matters as attending two financial counselling sessions at the trustee’s office, turning over any non-exempt assets to the trustee, and reporting to your trustee each month during the bankruptcy.
Has Your Discharge Been Opposed?
In rare cases your discharge from bankruptcy may be opposed by any of the trustee, your creditors or the Superintendent of Bankruptcy. If your discharge is opposed the matter will go to mediation before a Judge or Registrar of the bankruptcy court.
Get Free and Professional Bankruptcy Advice
If you are considering bankruptcy and are interested in learning more about the length of bankruptcy in your personal situation please contact a local Insolvency Trustee today to learn more about how bankruptcy will impact you and how long you will be bankrupt.