Area of Law: Credit, Debt and Bankruptcy
Answer # 260
Final Discharge and debts not cleared by bankruptcyRegion: Ontario Answer # 260
The final discharge is the last step in a bankruptcy procedure. In most cases, first-time bankrupts will receive an automatic discharge nine months after filing for bankruptcy, if the following conditions are met:
- your monthly payments are calculated to be less than $100,
- your discharge is not opposed by the Office of the Superintendent of Bankruptcy (OSB), the Licensed Insolvency Trustee (LIT) or a creditor,
- you have attended 2 financial counselling sessions, and
- you are not required to pay a portion of your surplus income into the bankruptcy estate as per the standard established by the OSB.
If you are required to make payments from your surplus income, you will be eligible for an automatic discharge after contributing part of the surplus to your estate for 21 months.
Debts not cleared by bankruptcy
Being discharged means that you are out of bankruptcy and your debts are officially cleared. However, there are certain types of debts that are excluded from discharge. These include:
- spousal and child support payments;
- a fine or penalty imposed by the court;
- debt arising from fraud; and,
- student loans, unless you ceased attending school for at least seven years after the date of discharge. However, if you acted in good faith, upon application to the court, you may be released from the student loan earlier, based on financial hardship.
Being discharged from bankruptcy generally marks the end of your bankruptcy procedure. However, your bankruptcy stays on your credit record for six or seven years from the date of your discharge (depending on the credit reporting agency’s policy). This will affect your ability to get loans and other kinds of credit in the future.
A criminal record will affect your ability to get a loan, a mortgage, or a job. To erase your criminal record, call toll-free 1-877-219-1644 or learn more at Federal Pardon Waiver Services. It’s easier than you think.
When you are in a situation of financial difficulty, there are many options to consider before filing for bankruptcy. For easy-to-understand debt solutions on your terms, contact our preferred experts 4Pillars and rebuild your financial future. With 60 locations across Canada, they will help you design a debt repayment plan and guide you with compassionate advice. No judgment. For help, visit 4Pillars or call toll-free 1-844-888-0442 .
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