How Long Will I Be Bankrupt in Canada?
Several factors affect the length of you being bankrupt in Canada. Your bankruptcy ends when you receive a discharge, the event that actually cancels your debts.
Most bankrupts in Canada are eligible for discharge after the minimum period of nine months. Your bankruptcy will last for more than nine months if the bankruptcy court orders your bankruptcy extended.
Here are the conditions that could prolong your bankruptcy:
Do you have surplus income?
If your income is considerably higher than the limits set by the government, it is possible that your bankruptcy will be extended for longer than nine months. For more information, see Surplus income.
Is this your first bankruptcy?
If you have been bankrupt before, you are not eligible for an automatic discharge from bankruptcy in nine months. Your bankruptcy will be extended for a period of time that will be determined by a Judge or Registrar of the bankruptcy court.
Have you completed all your duties as a bankrupt person?
If you have failed to complete one or more of your duties in bankruptcy, then your discharge will be delayed. The delay will depend on the seriousness of the failure and how soon you complete the missing duties.
Is your discharge opposed?
The discharge is usually granted if you are earning only enough income to keep yourself and your dependants reasonably provided for, and if you have received credit counselling.
Occasionally, creditors, the trustee, or the Superintendent of Bankruptcy oppose a bankrupt’s discharge. When this happens, the matter goes to mediation or is heard before a Registrar or a Judge.
Possible changes in the law
Reforms to Canada’s bankruptcy laws were introduced in 2005 that would have extended the length of bankruptcy in some cases. However, the 2005 Bill has died and it is unknown when changes will be introduced again in parliament and whether they will affect the length of bankruptcy. More details can be found in ourarticle on bankruptcy reform.
Get your trustee’s advice on being bankrupt in Canada
Your Licensed Insolvency Trustee will discuss the likely length of your bankruptcy with you during your first meeting, and will help you to keep it as short as possible. Contact a trustee in your area today.