If you want your debts to be eliminated you need to keep your eye on the goal. That goal is obtaining your bankruptcy discharge. To get that discharge, and have no more debts at the end, you need to complete the process — all of the process.
I can’t stress the importance of this statement enough. There are few options for changing your mind once you have begun and they all involve paying more money back to your creditors.
I meet people who did not complete the duties associated with their bankruptcy and come back years later surprised to hear that they were never discharged. What causes them to reach out is the fact that they have tried to get new credit or have needed to file another insolvency procedure only to find the original bankruptcy needs to be dealt with.
The duties required during your bankruptcy are not overly onerous. The biggest requirements include providing information to the trustee such as tax return information and monthly income and expense statements, making your necessary payments and attending two credit counselling sessions. These sessions are mandatory, not optional, but they are there for your benefit to help you recover from bankruptcy with stronger money management skills.
If you do not complete all of these duties you will not get discharged. Since your bankruptcy discharge is what eliminates your responsibility to pay back your debt, not receiving your discharge can pose a problem.
So what happens if you don’t finish the process? Well first, the trustee can apply to the court for his discharged. This means he is no longer administering your bankruptcy. Once this has happened on top of all of the other outstanding duties you will need to pay an additional fee up front to have the trustee reopen the file. You then need to complete all of your outstanding duties. And then, you need to have the bankruptcy court grant your discharge which may mean going to court and facing the judge.
Once the trustee is discharged, all of the original creditors are able to come back. They will charge you interest for the entire time you were supposed to be in bankruptcy and can begin to pursue collection activity again. They also have the right to pursue legal action against you, like put a lien on your assets or garnishee your pay cheque. And let’s say that the reason you went bankrupt in the first place was due to a garnishment, well, the original judgement is valid once again and they can go right back after your pay cheque and there will be nothing you can do to stop them either than pay the debt in full.
Bankruptcy doesn’t have to be hard. It is a process and you must complete the process. We are here to help you every step of the way but we can’t do it for you and once you start it is in your own best interest to finish.