What to Expect From a Discharge Hearing
Here’s what you need to know about attending a discharge hearing in Ottawa.
If you file for bankruptcy but don’t qualify for an automatic discharge, you have to appear in bankruptcy court to be relieved of your debt. Here’s what you need to know about attending a discharge hearing in Ottawa.
How does one obtain a bankruptcy discharge?
The majority of people who file for bankruptcy are automatically discharged at the end of their bankruptcy period. For first bankruptcies, this period is nine or 21 months after filing, depending on one’s surplus income. For second bankruptcies, this period is 24 or 36 months.
However, in some cases a person doesn’t qualify for an automatic discharge and must appear in bankruptcy court to discharge his or her debt.
Why do some people not qualify for an automatic discharge?
If you’re denied an automatic discharge and must appear in bankruptcy court, it’s typically for one of the following reasons:
- Failure to make surplus income payments. During your bankruptcy period, you may be required to pay 50% of your surplus income (i.e. the money you make in excess to what you and your family require for a reasonable standard of living).
- Failure to attend mandatory counselling sessions. After you file for bankruptcy, you’re required to attend two counselling sessions aimed at helping you better manage your financial affairs.
- Objections from a creditor. If one more of your creditors objects to you being automatically discharged, you’ll have to settle the matter in court.
- Past bankruptcies. If you’ve already had two or more bankruptcies, a discharge hearing is standard.
What are the possible outcomes in court?
One of four things can happen at a discharge hearing:
- An absolute discharge. You’ll be entirely relieved of your debt.
- A conditional discharge. You’ll be relieved of your debt as soon as you fulfill your remaining duties.
- A suspension of discharge. The time period of your discharge is extended.
- A refusal of discharge. You aren’t relieved of your debts.
What is the role of a Licensed Insolvency Trustee in this process?
If you have an upcoming discharge hearing, a qualified licensed insolvency trustee (LIT) will help you prepare for it and will deal with creditors and the court on your behalf. For example, if the reason for the discharge hearing is a failure to pay surplus income payments, your LIT will help you develop a payment plan to present in court. Your LIT will also tell you what to expect in court and will accompany you during your discharge hearing.
Personal Bankruptcy Solutions in Ottawa
You can count on the licensed insolvency trustees at D. & A. MacLeod Company Ltd. to handle your personal bankruptcy.
Contact us today to get a free online consultation.