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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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NOT DISCHARGED

I read the post and the reply (April 4). If the trustee is discharged and the bankrupt remains bankrupt, then how do the creditors “attack” the bankrupt. I thought no one could go after you if you are already bankrupt.

Could you please explain how a creditor can attack you?

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One Response to “NOT DISCHARGED”

A licensed trustee said...

Bankruptcy law protects people in two ways:

1) If you properly complete the procedure your debts are discharged (this means you are no longer required to repay the debt) – this is obviously the best result possible;

2) Until you complete your bankruptcy you are protected from your creditors ONLY while your trustee is active on your file. Once your trustee has been discharged (ie closes your file) you are no longer entitled to the laws protection.

For people that properly complete the procedure (clause 1), clause 2 isn’t all that important. For people that don’t complete the procedure properly, clause 2 means that once their trustee has been discharged the person ends up back where they started – their creditors may sue them, garnishee their wages, charge intertest and penalties, etc, etc.

There is an added “penalty” – you can’t file bankrptcy again until the first one has been completed. In addition, once the protections provided by the law are turned off there is no provision to turn them back on – if a creditor starts garnisheeing your wages they can continue to do so until you repay the debt or complete the bankruptcy.

Trustees realize that things go wrong for some people and in most cases, as long as your trustee thinks you are honestly trying to comply with your duties, they won’t close your file, but there are cases where it happens – the only way to fix it is to contact your trustee, find out what you need to do to complete the bankruptcy and then do it.