Court Hearing And Discharge
While most bankruptcies end in an automatic discharge, there are circumstances when the courts will be required to approve your discharge. You are not eligible for an automatic discharge and court hearing is required if:
- You do not complete your duties,
- any of your creditors or your trustee objects to your discharge, or
- if this is your third bankruptcy.
In bankruptcy court the bankruptcy judge will determine what actions you are required to take to receive your discharge.
There are four types of discharge that the judge can order:
- Absolute discharge; You will be fully released from your debts, except debts that are excluded by bankruptcy law.
- Conditional discharge; You are required to fulfill certain conditions prior to obtaining your absolute discharge. Conditions may include making additional payments, or completing your duties.; Once you have completed the conditions, the trustee must return to court to obtain your absolute order of discharge.
- Suspended discharge; This is an absolute discharge that does not take effect until a specific date in the future.
- Discharge refused;The court may refuse a discharge.
If you are thinking of filing for bankruptcy, contact an Ontario Bankruptcy Trustee about your situation. We can explain what your discharge will mean and help you through the process.
Phase : Filing Date 341 Meeting Of Creditors
The 341 meeting is scheduled about 30 days after the petition date. The meeting itself typically takes less than 10 minutes to complete.
While waiting for your 341 meeting, youâll likely hear from your trustee. Theyâll let you know what documents they need from you to prepare for your 341 meeting. As long as youâve kept the documents you used when preparing your bankruptcy forms, doing this shouldnât take very long.
Most filers also get the financial management course out of the way while they wait for their 341 meeting. Bankruptcy law requires every person filing bankruptcy to complete this education course. It tends to be a little longer than the first course, usually around 2 hours.
Can You Buy A House After Bankruptcy
*As of July 6, 2020, Rocket Mortgage® is no longer accepting USDA loan applications.
Do you have a bankruptcy on your record? If so, it can feel like youll never be able to return to financial normalcy. But the truth is that bankruptcy isnt a permanent black mark on your credit report. Its even possible to buy a home after bankruptcy if you know which steps to take.
Well take a closer look at how to buy a home after bankruptcy. Well also show you how long you need to wait after filing to apply for a loan and how you can maximize your chances of success.
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How Long Does Bankruptcy Affect My Credit Report
There are two main credit reporting agencies in Ontario: Equifax and Trans Union. Information about your bankruptcy or consumer proposal is reported to these agencies by the Office of The Superintendent of Bankruptcy , not your trustee. The OSB will advise these agencies when you file a bankruptcy or proposal and when you receive your discharge.
If you file ANY of a bankruptcy, consumer proposal, debt management plan or do a debt settlement, a not will appear on your credit report that can negatively impact your credit. In general:
- a first bankruptcy will remain on your credit report for six years or seven years ;after you are discharged;
- a consumer proposal (or debt management or debt settlement plan will remain on your credit report for three years after all of your payments are completed.
Bankruptcy does not mean you cannot borrow for six or seven years. This just means that the note will remain on your report, however there are many other factors that affect your ability to get credit.
If you have a job, and if you have a down payment or security deposit, it is possible to repair your credit sooner. Many people are able to buy a car or a house in less than seven years after their bankruptcy ends, if they are able to save money and begin repairing their credit. Here are some ways you can improve your credit after filing for bankruptcy:
What Is A Bankrupts Discharge
Lets start by defining what is meant by the term Bankrupts Discharge. Even people who have filed bankruptcy can be confused by the term.
When someone files an Assignment into Bankruptcy under the Bankruptcy & Insolvency Act, they put themselves into bankruptcy. This assignment comes with responsibilities and rewards. The bankrupt is now required to fulfil certain duties. Some of these duties include; reporting monthly income and expense information, attending financial counselling and making payments based on income and household size. Your Trustee will give you a complete list of duties.
The reward for fulfilling the duties is that you will be eligible for a Bankrupts Discharge. The discharge has the effect of erasing any further liability for the debts that qualified for discharge under the Bankruptcy and Insolvency Act. Needless to say, the most effective way to ensure that you get a discharge at the earliest possible date, is to fulfill the duties required of you in the bankruptcy process.
The goal of filing an Assignment in Bankruptcy is to obtain a Bankrupts Discharge, ridding yourself of the burden of your debt.
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May An Employer Terminate A Debtor’s Employment Solely Because The Person Was A Debtor Or Failed To Pay A Discharged Debt
The law provides express prohibitions against discriminatory treatment of debtors by both governmental units and private employers. A governmental unit or private employer may not discriminate against a person solely because the person was a debtor, was insolvent before or during the case, or has not paid a debt that was discharged in the case. The law prohibits the following forms of governmental discrimination: terminating an employee; discriminating with respect to hiring; or denying, revoking, suspending, or declining to renew a license, franchise, or similar privilege. A private employer may not discriminate with respect to employment if the discrimination is based solely upon the bankruptcy filing.
How Long Before I Recieve My Bankruptcy Discharge Papers
Most bankruptcy experts indicate that, under normal circumstances, an individual who files for bankruptcy can expect to receive his or her discharge papers within 90 days, or three months, upon receipt of notification that the bankruptcy was successfully discharged. According to others, a timeline of 120 days, or four months, is slightly more realistic. However, in any case involving bankruptcy, there is always a chance that some type of task may prove difficult to complete and thus result in a delay of the issuance of the discharge order.
Any delay will require some type of notification to inform the filer that the bankruptcy would be reopened. In some cases, the workload from an overwhelming number of bankruptcy filings that the court has to handle at any given time may contribute to a delay when it comes time to issue the final closing paperwork. Likewise, there are also several actions that must occur to the courts satisfaction in order for the trustee to agree to discharge the bankruptcy.
Any inconsistencies, appeals or activities that appear to be rare that come to the attention of the court will need to be reviewed prior to closing a bankruptcy, so the debtor must keep in mind that anything out of the ordinary that results in additional time and tasks will delay the discharging and sending of the required bankruptcy paperwork.
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Review Your Reports Once The Time Is Up
Once your bankruptcy has been completed and the seven- or 10-year clock has expired, review your reports again to make sure the bankruptcy was removed.
A bankruptcy should fall off your credit reports automatically, but if it doesnt, notify the credit bureaus and ask to have the bankruptcy removed and your reports updated.
Your Bankruptcy Case Ends When The Court Closes It Not When You Get A Discharge
Updated By Cara O’Neill, Attorney
Getting a discharge of your debts is a significant step in your bankruptcy, but it is not the end of your case. Your case ends when the court enters an order closing it. In this article, you’ll learn:
- when a Chapter 7 or Chapter 13 case closes
- why the court will reopen a Chapter 7 case, and
- when the court will revoke a Chapter 7 or 13 discharge.
Find out more about the differences between Chapters 7 and 13.
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Are All Of The Debtor’s Debts Discharged Or Only Some
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523 of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons .
There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523 applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.
Loans And Other Credit
After you have been discharged from bankruptcy, there is no legal;waiting-time requirement;that must be met in order to apply for most loans, such as personal loans or car loans. However, lenders will ask for your financial information, including whether you are employed, current debts and assets, in addition to obtaining credit reports which contain information about your credit history and bankruptcy. Therefore, before immediately applying for a loan after being discharged from bankruptcy, it is a good idea to spend some time on repairing your credit, which will increase your chances of getting a loan.;
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How Do I Get Discharged From My Bankruptcy
Question & Answer
You are discharged from your bankruptcy when you get an order that says you no longer have to pay most of the debts you owe. This means most of your debts will be erased and you will not have to pay any more money to most of your creditors. Once you are discharged, your bankruptcy ends.
In some situations, you will get an automatic discharge. And sometimes you have to go to court to be discharged. In most first bankruptcies, you receive an automatic discharge
For a first bankruptcy, you can be automatically discharged after:
- 9 months if you do not have to make surplus income payments,;or
- 21 months if you are making surplus income payments.
If you have filed twice for bankruptcy, you will get an automatic discharge after 24 months. If you are making surplus income payments and you have been bankrupt before, you will be bankrupt for at least 36 months.
Until you are discharged, you will still owe money to your creditors.
What Happens After Discharge From Bankruptcy
When the discharge order is entered, you should receive a copy in the mail. You may need your discharge order later, so keep it in a safe place. If you do not receive your bankruptcy discharge or it is lost or destroyed, you can get a copy from the Bankruptcy Court clerk.
If a creditor or debt collector contacts you after discharge or sends you a bill, send them a copy of your discharge order. If they continue to try to collect from you after receiving your discharge order, they are disobeying a court order. If the problem continues, your bankruptcy case can be reopened so the Court can decide whether and how to punish the debt collector.
After discharge, take advantage of the opportunity to build a stronger financial foundation and begin credit repair. Thatâs what the fresh start is for! That means managing your finances carefully, as you learned in the debtor education course. It also means carefully monitoring your credit report.
Unfortunately, some creditors and debt collectors are careless about the information they send to credit reporting agencies. Others intentionally leave misinformation on your credit report to try to pressure you to pay discharged debt in violation of the discharge injunction. To make sure you get the full benefit of your bankruptcy discharge, you must keep an eye on your credit report and do something about it if itâs incorrect.
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Can The Discharge Be Revoked
The court may revoke a discharge under certain circumstances. For example, a trustee, creditor, or the U.S. trustee may request that the court revoke the debtor’s discharge in a chapter 7 case based on allegations that the debtor: obtained the discharge fraudulently; failed to disclose the fact that he or she acquired or became entitled to acquire property that would constitute property of the bankruptcy estate; committed one of several acts of impropriety described in section 727 of the Bankruptcy Code; or failed to explain any misstatements discovered in an audit of the case or fails to provide documents or information requested in an audit of the case. Typically, a request to revoke the debtor’s discharge must be filed within one year of the discharge or, in some cases, before the date that the case is closed. The court will decide whether such allegations are true and, if so, whether to revoke the discharge.
In chapter 11, 12, and 13 cases, if confirmation of a plan or the discharge is obtained through fraud, the court can revoke the order of confirmation or discharge.
How Long Does A Bankruptcy Or Consumer Proposal Stay On My Credit Report
How long bankruptcy stays on your credit report in Canada;will depend on the credit bureau that is reporting.
The largest credit bureau in Canada, Equifax, maintains this record on your credit report for a period from the date of your discharge or last payment:
- A first bankruptcy for six years from the date of your discharge.
- A second bankruptcy for 14 years.
The TransUnion web site states that they keep a bankruptcy on your credit file for six to seven years from the date of discharge or fourteen years from the filing date .
At this point the bankruptcy will leave the credit report and you will need to start to rebuild your credit.
How long a consumer proposal stays on your credit report again depends on the credit bureau that is reporting.
With Equifax, a consumer proposal is reported for three years after your last payment.
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Disadvantages Of A Bankruptcy Discharge
Your bankruptcy protection doesn’t extend to joint account holders or cosigners on any of your debt obligations. Your personal liability for the debt is removed when you receive your bankruptcy discharge, but your cosigner remains on the hook for the entire balance of the debt. Creditors can still collect fromor even suecosigners and joint account holders for discharged debts.
You can voluntarily make payments on a debt to ensure that it’s paid in full.
Your bankruptcy discharge will additional appear on your and affect your credit score for seven years after you file for Chapter 13 protection, and for 10 years from the date you file for Chapter 7 bankruptcy.
Accounts associated with your bankruptcy might be deleted from your credit report if the date of delinquency preceded your bankruptcy filing.
How Often Can You File For Bankruptcy
The frequency of applying for bankruptcy depends on which type of bankruptcy youre filing, something known as the 2-4-6-8 rule. Heres a breakdown:
- Filing Chapter 13 after Chapter 13: two years.
- Filing Chapter 13 after Chapter 7: four years.
- Filing Chapter 7 after Chapter 13: six years.
- Filing Chapter 7 after Chapter 7: eight years.
Filing Chapter 13 immediately after Chapter 7 is also referred to as Chapter 20 bankruptcy. You wont receive a discharge when filing Chapter 20, since you arent waiting the full four years between Chapter 7 and Chapter 13, but this type of filing could give you the time you need to pay down debt.
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The Extended Automatic Discharge
Individuals who have never filed for bankruptcy before will spend a total of twenty-one months in bankruptcy if they are required to pay surplus income to their bankruptcy trustee. If this is your second bankruptcy, your time in bankruptcy protection is automatically twenty-four months, and it will be extended to thirty-six months if you are required to pay a surplus income.
Does Your Credit Score Go Up After Chapter 7 Discharge
Many Chapter 7 bankruptcy filers in the United States see a significant increase in their credit scores almost immediately after discharge. One study from the Federal Reserve of Philadelphia showed an average increase of more than 80 points. And, that was before any post-discharge credit repair efforts. Another study from a nationwide lending broker showed that nearly â of bankruptcy filers had credit scores of 640 or higher within two years of filing. Bankruptcy stays on your credit report for 7 or 10 years depending on the type of bankruptcy. But, for people who were struggling with debt before they filed, that is often outweighed by the debt relief they get from their bankruptcy filing.
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