What Must I Do During Bankruptcy?
When a person is bankrupt they must complete a number of duties in order to receive their automatic bankruptcy discharge.
If you do not complete your duties the Trustee, the OSB (Office of the Superintendent of Bankruptcy), or your creditors can object to your discharge, which means you will be in bankruptcy longer and it will be more expensive.
There are duties and responsibilities that you must perform both at the start of the bankruptcy and during the bankruptcy process.
The duties you must complete at the start of bankruptcy include:
- Surrendering to your Trustee all of your non-exempt assets so the Trustee can sell these assets and distribute the funds to your creditors (the Trustee will first hold these funds in a Trust);
- Surrendering all of your credit cards to the Trustee, including those with zero balances – you cannot keep any credit cards in bankruptcy.
During the bankruptcy process you will have more duties to complete:
Attending Two Counselling Meetings: During the time you are bankrupt you will be required to attend two counselling sessions with the Trustee in order to receive your automatic discharge. These meetings will take place at the Trustee’s office and you have the choice of attending these meetings one-on-one with the Trustee or with a group of other bankrupts that are working with the same Trustee.
These meetings will take place at the Trustee’s office and you have the choice of attending these meetings one-on-one with the Trustee or with a group of other bankrupts that are working with the same Trustee.
The first session will take place between 10 and 60 days after the date of your bankruptcy filing and will cost $85 plus GST. The second counselling session must happen before 210 days have past from the date of your bankruptcy filing and also costs $85 plus GST.
The purpose of these meetings is to give you an understanding of your finances and to have a better understanding of the causes that lead to your bankruptcy so you can manage your finances in the future. With these counselling meetings you will learn budgeting and money management tips. With these tips you will have an easier time staying out of debt in the future.
Monthly reporting: One of the duties of a bankrupt is to provide their Trustee with reports on their income and expenses during their bankruptcy. You must also report a change in your family situation –
You must also report a change in your family situation – for example if you have more or less dependents (through marriage or a separation) then you must report this to your trustee, which could also have an impact on the cost and length of your bankruptcy.
The Trustee will provide you with all of the necessary forms to provide them this information.
This reporting will be required if you have a change of income to determine if you have any surplus income payment requirements. You will also be required to inform the trustee where you are living.
Creditors Meeting: If a creditor’s meeting is requested you will be required to attend this meeting. However, in most personal bankruptcies there is no creditors’ meeting request.
The purpose of this meeting is to give creditors an opportunity to ask you questions and learn more details about your bankruptcy and other financial details.
If the creditors request a meeting they must hold at least 25% of the proven claims of your debt.
The Superintendent of Bankruptcy can also call for a creditor’s meeting. But again, in the vast majority of personal bankruptcies no meeting of the creditors will be held.
Other duties: If the Trustee requests your assistance with your bankruptcy you must provide the requested information or assistance.
An undischarged bankrupt cannot be a director of a company nor can they borrow more than $500 without telling the lender you are bankrupt.
Receiving Your Bankruptcy Discharge
In order to receive your automatic discharge you must complete all of your duties in a timely manner; without completing these duties you won’t be able to receive your discharge and you will remain bankrupt until all of the duties have been completed.
The purpose of these duties is to give you money management tips and advice so it is in your best interest to complete these duties in a timely manner regardless.