Area of Law: Credit, Debt and Bankruptcy
Answer # 261
Second-time bankruptsRegion: Ontario Answer # 261
The final discharge is the last step in a bankruptcy procedure. If it is not your first time filing for bankruptcy, or if one of your creditors objects, it may be more difficult to have your debts discharged. In most cases, first-time bankrupts will receive an automatic discharge nine months after filing for bankruptcy if certain conditions are met.
If you are going bankrupt for the second time, you may also qualify for an automatic discharge, but only in the following circumstances:
- You may qualify for an automatic discharge within 24 to 36 months, depending on if you have excess income and made a minimum payment of $100 per month.
- If you have surplus income of less than $200, you are not required to make payments and you will receive an automatic discharge 24 months after filing.
- If you have surplus income of $200 or more, you must pay minimum monthly payments of 50% of the surplus income and you will be automatically discharged 36 months after filing.
If you are granted an automatic discharge, there is no court hearing and the Licensed Insolvency Trustee (LIT) sends you a copy of the discharge.
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.
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