It’s Critical to Complete Your Bankruptcy and Get your Discharge


Category: Personal Bankruptcy (16) comments

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.

no more debts means obtaining bankruptcy discharge

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.

Leave A Comment

  1. Leona M.

    I am in a second bankruptcy, and have not done much of anything. I honestly can’t afford the payment.
    I don’t know what to do?

    Reply
    1. J. Douglas Hoyes

      Hi Leona. You should immediately contact your trustee and work out a plan. If you don’t complete your duties a court hearing will be scheduled, so it is better to have a strategy worked out with your trustee to complete your bankruptcy if possible.

      Reply
  2. Rich St Thomas

    Hi I filed for bankruptcy but failed to make all my payments . The trustee has since been discharged and my bankruptcy is not complete . This was several years ago . Is it possible to start making payments to someone in order to complete the bankruptcy or can/should I restart ??

    Reply
    1. Ted Michalos Post author

      You should contact the trustee that originally handled your bankruptcy to see what they think you need to do in order to be discharged (complete the bankruptcy). You may approach a different trustee or ask a lawyer to assist you, but at the end of the day, the Court will ask your original trustee what items/duties remain outstanding and you will need to complete those duties in order to be discharged.

      Reply
  3. Lindsay Manning

    I filed for bankruptcy in August 2013 and never finished it. I have paid a lot of the debts off myself that were included in the bankruptcy. My question is, since I can’t seem to find it anywhere on the internet… Will an unfinished bankruptcy at any point purge from my credit report or will it remain there forever until discharged?

    Reply
    1. Ted Michalos Post author

      Most “history” items on your credit report disappear after 7 years. The 7 year clock starts when the event is last reported to the credit bureau – that was probably whenever the trustee closed their file. The fact that you are an undischarged bankrupt remains until you are discharged. If you apply for credit, or a job or are asked “have you ever filed for bankruptcy will always be “yes” and if they ask when you completed the file the answer will be “I didn’t”. If you’ve paid off most of the debts you may want to contact the trustee that handled the file to see about having the bankruptcy annulled. It involves going to Court, but depending on what you still owe, it might make sense…

      Reply
  4. Kristina

    My husband filed for bankruptcy while we were separated this was about 12 years ago. He did not follow through with the bankruptcy and the trustee that he had no longer exists so what are our options for him to complete the bankruptcy and be discharged?

    Reply
    1. J. Douglas Hoyes

      Hi Kristina. If he is an undischarged bankrupt and the trustee no longer exists you should contact the Office of the Superintendent of Bankruptcy and ask them for copies of your file which may indicate what actions are required to complete the bankruptcy. It may then be necessary to find a trustee or insolvency lawyer to make an application to bankruptcy court to obtain his discharge.

      Reply
  5. Daphne T.

    Dear Mr. Michalos, I haven’t been discharged since 2009 because I didn’t attend the bankruptcy hearing due to the birth of my son and I suffered health issues from the birth for almost a year after. I still have not been discharged and it’s very frustrating dealing with my trustee who now won’t release/reopen the file unless I pay a large fee,. I had an insolvency lawyer look at the case, and I was waiting for him to administer a motion to the court to finalize the discharge, although was never processed properly. Would I be able, personally, to file a motion myself to the court, with the aid of a lawyer, since I did all my duties and now almost ten years later I’d imagine the bankruptcy should be dissolved somehow? Since one of my creditors, in a letter, stated, their loan was already discharged, however, to my understanding, an actual certificate of discharge Is needed to finalize an actual bankruptcy.

    Reply
    1. J. Douglas Hoyes

      Yes, you can make a motion to court yourself; you should contact the bankruptcy court and ask the court clerk to advise you on the forms that need to be filed in court, and ask them to book a hearing date so that you may appear. Ideally having an insolvency lawyer make the court motion is preferable, because they understand all of the requirements and therefore will have a greater chance of success.

      Reply
  6. Roxanne

    Hello,
    I was pressured into bankruptcy by my boyfriend at the times parents, I went to the meeting but then we were victims of a violent home invasion, that left me traumatized due to what was done to me, and Because of the threat made we had to flee for our safety.

    I didn’t want to mess up with bankruptcy but had to leave, It was with JP Graci, and since I’ve contacted the office they say they have nothing on me but I need to finish what I started as It will never leave my credit.

    What’s an option for me? Any help is appreciated. Thank you for taking the time of read and answer my concern and question.

    Reply
    1. Ted Michalos Post author

      Bankruptcy law is particularly clear – if you start the process you must finish the process. If it remains unfinished you remain an “undischarged bankrupt”. There are a few different ways to finish the process:
      1) complete the duties and responsibilities of a bankrupt – this means going back to JP Graci and asking them for a specific list of what you need to do in order to complete your bankruptcy. This is the most common way to finish a bankruptcy.
      2) File a consumer proposal based on the debts from your bankruptcy. Once approved by the Court the consumer proposal causes your bankruptcy to be annulled (cancelled). You don’t have to use JP Graci to file the consumer proposal. A word of warning – if you file a proposal, but don’t complete it you will be deemed to have filed bankruptcy again.
      3) Apply to the Court to have your bankruptcy annulled. To do this you must prove either you were not eligible to file bankruptcy in the first place, or that you have repaid all of the debt sin full. You’ll need a lawyer to bring this motion for you.

      There are a small percentage of people that never complete their bankruptcies. It means accessing credit in the future will always be difficult and usually, at some point, you;ll want to apply for a mortgage or loan that may require you to complete your bankruptcy. As a general rule, the sooner you complete a bankruptcy the easier it is to do so – the more time that passes the more difficult it may become.

      Reply
  7. Lorraine

    Im in a second bankruptcy and due to circumstances took me several years to complete my payments to the trustee. they were aware I was having difficulty. I have now completed all payments and counselling sessions and have a hearing date. I did go to one hearing a few years ago but the judge wanted to be sure I had all my tax returns done before discharging. All that is done and paid up to date.
    My question is when I go to the hearing, will I be asked to pay more towards my bankruptcy – at the time I had a job that did not pay well and in the last year and half I obtained a new job that pays almost twice as much
    Also can my creditors named in the bankruptcy come after me still

    Reply
    1. Ted Michalos Post author

      While quite literally the Court may Order whatever it feels is reasonable at a Discharge Hearing, if the Court asked you to make sure taxes were filed and paid last time you were there and you have done that then the Court is unlikely to ask you for anything further. If you are concerned I suggest you call your trustee and ask them if any new issues have come to light and whether or ton the trustee will be asking the Court to impose any additional conditions on your discharge.

      Once you have been discharged you are no longer legally obliged to deal with the debts listed in your bankruptcy. Unless a debt falls under Section 178 of the Act (Google it if you’d like to see a list of these debts).

      Good luck with your future.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *