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Default on Bankruptcy – What do I do now?

My husband and I were a couple of years into a consumer proposal when we lost our home due to foreclosure. We then filed for bankruptcy, went through the counselling classes but we’re unable to keep up with the payments that were set out as they were over $1000 per month. The trustee discharged us as we defaulted. We want to get out of our debt and start repairing our credit. What do we do now?

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One Response to “Default on Bankruptcy – What do I do now?”

Doug Stuive, CA | Trustee | CIRP said...

Based on the sequence of events that you have outlined it sounds like you were required to make payments to your trustee in bankruptcy due to the income you and your husband earned. This is called a surplus income obligation and it is based on the income earned by the household in comparison to the guideline the government sets for your family size. If you do not complete the payments owing due to your surplus income obligation then you are not eligible for a discharge from your bankruptcy. I am assuming the trustee closed your file and received their discharge from your bankruptcy and you and your husband remain undischarged bankrupts. If that is the case you can still work towards getting a discharge from your bankruptcy even though the trustee has closed your file. The first thing you need to do is determine what the outstanding matters are in your bankruptcy that prevented you from obtaining a discharge. It may be only the payments that are outstanding but you should make sure there is nothing else required of you. You can work with your previous trustee to get this information. You may also wish to contact the Office of the Superintendent of Bankruptcy to see if they can provide you with your paperwork. From there you can see if your trustee is willing to reopen your bankruptcy estate so you can work on the requirements to meet your discharge. If your trustee is not willing to do that you can work with a lawyer that understands the bankruptcy process. If you are unable to meet your surplus income obligations for any reason only the Bankruptcy Court can waive or alter these payment requirements.