Second Time Bankruptcy and Bankruptcy Discharge

Bankruptcy is a legal process. A difference between first and second time bankruptcy is that in a case of second-time bankruptcy you are not eligible for an automatic bankruptcy discharge in as little as nine months – as is the case when personal bankruptcy is filed for first time.

Under new rules passed by the government, BUT NOT YET IN FORCE, a second-time bankrupt will be eligible for an automatic discharge in 24 months, provided he/she has no surplus income. If there is surplus income, the debtor will be eligible for an automatic bankruptcy discharge in 36 months. Please refer back to this page; we will post an update when the new rules come into effect, which is expected to happen in 2009 or 2010.

Surplus income is defined as the amount of money you earn over the government threshold in one month time period.

If a creditor opposes your bankruptcy discharge, your second time bankruptcy could last longer than the minimums set out above.

In some cases a consumer proposal is a better option than a second bankruptcy, since by filing a proposal you have certainty over what you will be required to contribute during the process.

Before deciding to file for a second time bankruptcy, you should fully understand all of its implications, including prolonged bankruptcy discharge. We recommend you to contact a Licensed Insolvency Trustee today and arrange for a no-charge initial consultation.