What debts survive my bankruptcy or proposal?
The following debts will survive your bankruptcy or proposal. The onus is on the creditor to prove that a debt comes within these categories or their debt will be discharged. You should therefore discuss with your trustee any debts that you have that may survive a bankruptcy or proposal.
- Fines, penalties, or restitution orders issued by the court;
- Damages assessed in a civil court for bodily harm, sexual assault or wrongful death;
- Alimony, maintenance or support; Fraud, embezzlement, or misappropriation while acting in a fiduciary capacity;
- Dividend a creditor would have been entitled to receive in a bankruptcy if you intentionally failed to disclose the creditor; or
- Student loans within ten years of the date of bankruptcy.
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How do I rebuild my credit after my proposal or bankruptcy?
The fact that you were bankrupt or filed a proposal remains listed at the credit bureau for 6 years following your discharge from bankruptcy or 3 years after the completion of your proposal. Logically this information will impact the decision of anyone investigating your credit rating and therefore you may find it more difficult to obtain credit. The following options may assist in reestablishing your credit rating.
- Retain a copy of your discharge order (Bankruptcy) or Certificate of Full Performance (proposal) and the final Statement of Receipts and Disbursements which shows any distribution to your creditors (sent to you on your trustee’s generally 12 to 18 months following your discharge). This information may be useful to provide to your lender, particularly where your creditors received a significant distribution.
- File a personal statement at the credit bureau. The credit bureaus will accept a 100 word statement by you that is provided to any party requesting a credit report. If you have particular circumstances that you believe should be disclosed, you may wish to assess the credit bureau links to investigate this option further.
- Pay all your bills on time to avoid your creditors filing negative reports at the credit bureaus.
- Open a savings account to demonstrate your financial stability. You may find it useful to open this account at a separate bank where access is not convenient. Deposit regular payments to build the balance (a portion of your next raise, bottle recycling fees, rolled coins, etc. that are not readily missed). You may also want to investigate your company payroll benefits as some employers offer payroll deductions for Canada Savings Plans.
- Apply for any credit card you can obtain. If you are experiencing difficulty in obtaining a credit card, please refer to the next question “How do I obtain a credit card after my bankruptcy?” for assistance.
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How do I obtain a credit card after my bankruptcy?
It is possible to obtain a credit card after bankruptcy. You should consider the following options in obtaining your credit card.
- Apply for a credit card that was not included in your bankruptcy.
- Obtain a credit card in your name that is co-signed or guaranteed by your employer or other third party.
- Ask your bank if they have options for a credit card, perhaps with a prepaid balance or secured by a savings account.
- Apply for a secured credit card with one of the following companies:
- Home Trust Company VISA
- Horizon Plus Mastercard or
- Capital One Mastercard
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There was an objection to my discharge – How do I get out of bankruptcy?
Where the Trustee, a creditor or, in rare instances, the Superintendent of Bankruptcy object to your discharge from bankruptcy, you may not receive an automatic discharge or Absolute Order of Discharge. The court will grant one of the following types of orders instead:
Conditional Order of Discharge:
This order imposes certain conditions that must be met before making application to the court for a discharge. Please refer to the next question, I have a Conditional Order of Discharge – what happens next? for additional information.
Suspended Order of Discharge:
In certain instances where the court is unable to grant an Absolute Order of Discharge, (i.e. the debtor has not complied with all the duties or can be held responsible for the bankruptcy) a suspension for a specified period of time may be made. You will have to review the order carefully as often the suspended order will specify that the debts are discharged after the specified time and no further application is required to obtain your discharge.
Adjourned Order of Discharge:
The Trustee is required to make an initial application for the discharge of a bankrupt, generally within 9 months. Where the Trustee is unable to complete the administration of the estate due to an uncooperative debtor that has failed to comply with the duties of a bankrupt, the Trustee will recommend an adjourned order. This order places your discharge on hold until you make an application to the court. You are cautioned that once the Trustee has obtained their discharge, the stay against your creditors is no longer in effect, your debts are not discharged, and your creditors may proceed against you as though you had never filed an assignment in bankruptcy.
Refused Order:
This type of order is granted by the court in extreme circumstances where there is a blatant misuse of the bankruptcy system. It is extremely difficult to obtain a discharge after the court has granted this type of order. You are cautioned that where your discharge has been refused, once the Trustee has obtained their discharge the stay against your creditors is no longer in effect, your debts are not discharged, and your creditors may proceed against you as though you had never filed an assignment in bankruptcy.
In each of these instances, the onus is on you to apply for your own discharge. Although it is recommended that you obtain legal counsel to obtain your discharge, you may apply for your own discharge. In the event that you wish to file your own application for discharge, you should contact the provincial Supreme Court to obtain instructions on the application process.
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I have a Conditional Order of Discharge – what happens next?
A Conditional Order of Discharge is granted by the court when certain conditions are to be met for your discharge. These generally involve the payment of a sum of money over time.
- Until the terms of your conditional order have been met:
- You are required to provide the Trustee with such information as requested relating to your earnings, after-acquired property and income;
- You must file with the Trustee each year a sworn statement providing details on any property or income you have acquired since your order was granted or you last reported to the trustee;
- Once you have complied with all the conditions outlined in your conditional order, you should contact your Trustee to receive an Affidavit or amended Report of Trustee indicating that you have met the conditions. Your Trustee may obtain an Absolute Order on your behalf, but is not obligated to do so.
- Where after the expiration of one year following the granting of the conditional order, your financial circumstances are such that you do not believe you can comply with the terms of the order, you may apply to the court to have the original order varied. You may wish to obtain legal counsel or you can consult with the provincial Supreme Court staff in the district in which your bankruptcy was filed staff for a self-help package on obtaining your own discharge.
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