How Long Will My Bankruptcy Last?

“How long will my bankruptcy last?” The answer to this commonly asked question shall depend on the following factors:

• • Whether or not you have been bankrupt before
  • Whether or not you are required to pay surplus income
  • Whether or not you’ve fulfilled your obligations in your bankruptcy proceedings

Automatic Discharge

First-time bankruptcy filing, no surplus income

If you’ve never filed for personal bankruptcy before and you aren’t required to pay surplus income,  it will last for 9 months. You’ll receive an automatic discharge from our office and your debts will be legally extinguished on the day that is 9 months plus one day after the day you filed.

First-time filing with surplus income

If you’ve never filed for bankruptcy before and you are required to pay surplus income, it will last for 21 months. If you’ve paid your surplus income obligations within the 21-month period, you’ll receive an automatic discharge from our office and your debts will be legally extinguished on the day that is 21 months plus one day after the day you filed.

Second-time bankruptcy filing, no surplus income

If you’ve filed for bankruptcy before and you aren’t required to pay surplus income, your bankruptcy will last for 24 months. You’ll receive an automatic discharge from our office and your debts will be legally extinguished on the day that is 24 months plus one day after the day you filed.

Second-time filing with surplus income

If you’ve filed for bankruptcy before and you are required to pay surplus income, it will last for 36 months. If you’ve paid your surplus income obligations within the 36-month period, you’ll receive an automatic discharge from our office and your debts will be legally extinguished on the day that is 36 months plus one day after the day you filed.

In all of the above scenarios, the Trustee issues to a discharged bankrupt a document called a “Certificate of Discharge” which confirms that he has been discharged from bankruptcy.

Discharge application at bankruptcy court

If you haven’t fulfilled your obligations in your bankruptcy proceedings, such as:

1. 1. Neglecting to attend credit counseling at the Trustee’s office
   2. Failure to pay surplus income obligations or the Trustee’s professional fees
   3. Failure to keep proof of income and a record of household expenses

then your discharge will be delayed. The Trustee will be required to oppose your automatic discharge, and the Trustee would schedule a discharge application hearing at the bankruptcy court. You’d be required to attend and explain to the court why you failed to fulfill your obligations in your bankruptcy proceedings.

At your discharge application hearing in court, the court will likely issue an Order giving you time to remedy the unfulfilled obligations in your bankruptcy proceedings. Once you’ve fulfilled your outstanding obligations, your Trustee will arrange to obtain an Order of Absolute Discharge from the court .

On the other hand, if your fails to attend your discharge hearing at court, it will issue a “No Order”. This simply means that the court was not able to issue any order due to your failure to attend your discharge hearing. In this situation, you’d remain undischarged and you would remains obligated to your creditors. Your creditors can proceed to pursue you again once the Trustee closes your file.

Length of a bankruptcy versus length of bankruptcy on a credit report

Now, having explained the above, one must distinguish how long a bankruptcy lasts with how long it stays on a credit report. People sometimes confuse these things with one another.

Someone is not “bankrupt for 7 years” as is commonly believed. Someone is bankrupt between the time he files and the time he obtains his discharge (as explained in the preceding sections). However, a record of it will stay on his credit record well beyond the time he has finished it.

Generally, if you have filed bankruptcy, both Equifax and TransUnion remove it from your credit report 6 years after the date you are discharged.

TransUnion removes it from your credit report 7 years after you are discharged in the following provinces:

New Brunswick
Newfoundland and Labrador
Ontario
Prince Edward Island
Quebec

If you declare more than once, then the bankruptcies will appear on your credit report for 14 years.

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