The very idea of having to go to court can be intimidating for many, regardless of the reason or the offence for which you are paying the visit. However, this doesn’t have to be the case, especially when you’re filing for bankruptcy.
In Canada, bankruptcy is a legal process that can help individuals eliminate their debts, and in most cases, individuals do not have to go to court to do so. Bankruptcy is filed through a Licensed Insolvency Trustee.
Once you have completed the process and all of your required duties you will receive a certificate of discharge outlining how your bankruptcy requirements were met. There are two ways an individual can be discharged from bankruptcy, including an automatic discharge or a court-ordered discharge.
If you are eligible for an automatic discharge, you will not be expected to attend a court hearing, and you will be released from your debts. Alternatively, if you do not qualify for an automatic discharge, your Trustee will be required to apply to the court hearing to review your discharge.
Complete Your Duties for Automatic Discharge
An automatic discharge is a relatively simple route for most individuals who file for bankruptcy. If the bankrupt is entitled to an automatic discharge, then there is no formal application or hearing required at the court for discharge to be granted.
If it is your first or second bankruptcy, you will be eligible for an automatic discharge as long as the following requirements are fulfilled:
- All of your bankruptcy duties have been appropriately completed
- If there is no opposition or challenging of your discharge
When you file for bankruptcy, certain duties are required to be completed before you can be discharged, including attending two credit counselling sessions. If these duties are not completed, your Trustee can oppose your discharge from Bankruptcy, in which case you will be required to attend a discharge hearing in bankruptcy court.
When you are asked to attend a court hearing, you will be expected to explain why you didn’t complete your duties. So to avoid this lengthy and avoidable procedure, it is wiser to simply complete all that is required of you.
The easiest way to be granted an automatic discharge is to ensure that your duties and responsibilities of bankruptcy are completed. However, even if your responsibilities and duties are completed, one or more of your creditors could still oppose your discharge.
In this situation, you will be required to attend a bankruptcy court hearing. Luckily, this is a very unusual and rare situation and only occurs in less than 1 in 100 bankruptcy cases in Canada.
The main reason why a creditor would oppose your discharge would be to convince the court that you should make more payments or perform extra duties. In most cases, it is usually not the creditor who opposes your discharge, rather your Trustee, if you fail to complete all of your bankruptcy’s responsibilities and duties.
Another situation in which an individual would be expected to attend a bankruptcy court hearing is filing for their third bankruptcy. An individual becomes ineligible for an automatic discharge upon filing for their third bankruptcy, and therefore a bankruptcy court hearing is required to determine the terms of discharge.
Don’t Fear the Courts
If you are genuinely struggling with debts and do not have the ability or resources to pay off your creditors, turning to bankruptcy is a viable option. Many individuals fear the possibility of ending up in bankruptcy court when they file their claim; however, this should not be feared, nor is it common.
Additionally, if you have not committed any fraud, have included accurate and true information on your forms, then there is no need to fear being summoned to the courts or dealing with numerous lawyers.
In the odd situation that a mandatory court appearance is required, such as due to an opposing creditor, remain calm and confident that your bankruptcy will eventually be discharged. Bankruptcy can be a stressful time for many, which is why we’re here to help you navigate this difficult time. Our team of highly dedicated and experienced professionals can help you build your brighter financial future.
To learn more about how to file for bankruptcy without going to court, call Kevin Thatcher and Associates at 1-866-719-8547 or contact us here.