Bankruptcy, How Long Does It Take?
Signing the initial paperwork does not mean that the process is over. It does not entail that you have eliminated all your debt in a snap. Filing for bankruptcy is going to take a due process. During the process, you’ll get an automatic stay that will hinder your creditors from collecting payments. However, you’ll stay be obliged to pay them through your bankruptcy trustee. The only time that you can eliminate your obligations is during bankruptcy discharge. This could take a few months after filing. Once you’ve met the bankruptcy duties on your bankruptcy agreement. You will be discharged from bankruptcy as soon as you get an order not to pay most of your debt.
Your timeline for discharge will be distinguished by numerous factors. Upon filing, you’ll have to make sure that you’ve satisfactorily met the agreement stipulated in your bankruptcy duties. Mostly, filing for bankruptcy can help you wipe out your debt more quickly than getting a debt consolidation loan or undergoing consumer credit counseling. However, considering other debt relief options such as debt settlement and consumer proposal would be preferable; provided, it can help you clear your debt and can prevent in risking your credit repute.
What is Normal Automatic Discharge?
In Canada, most of the bankruptcies are discharged automatically within a period of 9 months. By doing so, you can have your life back instantaneously after filing for bankruptcy. On the contrary, if you are not qualified for an automatic discharge, you’ll have to wait for the process to prosper in due time. This may be due to the prerequisite in paying surplus income, or income payment order. Also, you will not be qualified for an automatic discharge if you’ve been bankrupt before. Moreover, certain benchmarks may also delay your automatic discharge, regardless if you’re not under the income payments agreement, or it’s your first time to file for bankruptcy.
What is Extended Automatic Discharge?
In some cases, you will get a delay in your automatic discharge if you are urged to pay a surplus income that you will pay to your bankruptcy trustee. If it’s your first time filing for bankruptcy, it will take you a total of 21 months when obliged to pay for surplus income. On the contrary, if it’s the second time you filed for bankruptcy, you’ll inherit an automatic stay within 24 months; this will further extend to 36 months when urged to pay a surplus income.
What is Non-Automatic Discharge?
Regardless if you have satisfied the criteria to qualify for an automatic discharge or perhaps an extended discharge, there are a variety of factors that may suspend the discharge process. Also, you have to reconsider these painstaking processes of filing for bankruptcy and the devastating effect that it will cause:
- If you have filed for over two bankruptcies before, you’ll be obliged to present yourself in court and request for discharge.
- If you’re harassing creditor appeals, you cannot get an automatic discharge. Beware that your creditor is given the authority to appeal your filing. Although this is not commonly usual to many, you might have to consider the circumstances. This may cause a delay in your discharge but will not hinder it; unlike, during consumer proposals, where your creditor can refuse and entirely derail the proposal.
- During bankruptcy, getting an automatic discharge can also be prevented if you fail to satisfy your bankruptcy duties; thus, you have to ensure constant communication with your trustee to avoid any delay.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.