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FORM 80 NOTICE OF OPPOSITION TO DISCHARGE OF BANKRUPT: OUR COMPREHENSIVE GUIDE FOR CREDITORS AND TRUSTEES

What Is The Notice of Opposition?

When an insolvent person files a bankruptcy insolvency process in Canada, the ultimate goal is to receive a discharge from their debts. However, this process isn’t always automatic. Sometimes, creditors or trustees may have valid reasons to oppose a bankrupt person’s discharge. This is where the Form 80 Notice of Opposition To Discharge Of Bankrupt becomes crucial.

Understanding how Form 80, the prescribed form, works can make a significant difference in protecting your interests as a creditor or ensuring proper administration of the bankruptcy estate as a trustee. This comprehensive guide will walk you through everything you need to know about Form 80, from who can file it to the specific grounds for opposition.

Whether you’re a creditor concerned about a consumer debtor’s conduct during bankruptcy or a trustee identifying issues with compliance, knowing when and how to use Form 80 is essential. The bankruptcy system relies on honest disclosure and cooperation from all parties, and the Notice of Opposition serves as an important safeguard to ensure these principles are upheld.

Introduction: Understanding the Discharge Process and the Role of Opposition

The bankruptcy discharge process in Canada is designed to give honest but unfortunate debtors a fresh start while protecting the rights of creditors and maintaining the integrity of the system. However, this balance requires careful oversight, and sometimes formal opposition is necessary to address concerns about a bankrupt’s conduct or compliance.

What is Bankruptcy Discharge?

A bankruptcy discharge is the legal release of a bankrupt person from either all or most of their debts and obligations that existed at the time of filing for the bankruptcy insolvency process. When someone receives their discharge, they are no longer legally required to pay the pre-bankruptcy debts released by their bankruptcy discharge. There are some exceptions, like student loans less than seven years old, court fines, and support payments.

The discharge represents the end goal of the bankruptcy insolvency process. It allows individuals to move forward without the burden of overwhelming debt, provided they have met their obligations during the bankruptcy period. For most first-time bankrupts who comply with their duties, discharge happens automatically after nine months for individuals without or 21 months for those with surplus income requirements.

However, not all bankrupts are entitled to an automatic discharge. When there are concerns about the bankrupt’s conduct, honesty, or compliance with bankruptcy requirements, interested parties can file a Form 80 Notice of Opposition To Discharge Of Bankrupt to bring these issues before the court.

Why is Discharge Important for a Bankrupt?

The discharge is the light at the end of the tunnel for most people going through bankruptcy. Without discharge, a person remains legally obligated to pay their pre-bankruptcy debts, even though they may have already lost their assets and gone through the bankruptcy process.

Discharge also restores many civil rights and privileges that may be suspended during bankruptcy. It allows the former bankrupt to obtain credit more easily, serve as a director of a corporation, and engage in business activities without the restrictions that apply during active bankruptcy status.

For these reasons, most bankrupts are highly motivated to comply with their obligations and obtain their discharge as quickly as possible. When problems arise that might delay or prevent discharge, they create significant consequences for the bankrupt person.

Form 80 Notice of Opposition To Discharge Of Bankrupt guide showing a split image of a depressed woman with too much debt and the other image is the same happy woman after receiving her discharge from bankruptcy
notice of opposition

Types of Bankruptcy Discharge: Understanding Your Options and Outcomes

When facing a Form 80 Notice of Opposition To Discharge Of Bankrupt, it’s important to understand that not all discharge outcomes are the same. The court has several options available when dealing with opposition cases, each with different implications for the bankrupt person, their trustee, and unsecured creditors. The bankruptcy discharge is a very important part of the bankruptcy administration. The discharge completely releases the bankrupt from all debts that existed at the date of bankruptcy, with limited exceptions such as student loans less than seven years old, court fines, and support payments.

Absolute Discharge: The Best Possible Outcome

An absolute discharge is the most favourable outcome for any bankrupt person. Normally, the absolute discharge is given as an automatic discharge by the trustee. However, there are occasions where a bankrupt’s application for discharge must be heard by the court. One option the court has, if the evidence shows that the consumer bankrupt did not commit any offences or other inappropriate behaviour, is to grant an absolute discharge.

When an absolute discharge is given or granted, it means the bankrupt has met all their obligations satisfactorily and there are no grounds to impose additional conditions or delays. The discharge takes effect immediately upon the court order being granted.

For the bankrupt person, an absolute discharge represents the complete fresh start that bankruptcy is designed to provide. They can immediately begin rebuilding their credit, engaging in business activities, and moving forward without the burden of pre-bankruptcy debts.

From the trustee’s perspective, an absolute discharge indicates successful administration of the bankruptcy estate. All required duties have been completed, and there are no outstanding issues requiring ongoing supervision or intervention.

Unsecured creditors must accept that their claims are extinguished upon absolute discharge. While they may not recover the full amount owed, the discharge provides certainty and finality to the bankruptcy process.

Conditional Discharge: Meeting Specific Requirements

A conditional discharge requires the bankrupt to fulfill specific conditions before the discharge becomes effective. These conditions are tailored to address particular concerns raised during the opposition process or identified by the court.

Common conditions include paying a lump sum to the estate, making monthly payments for a specified period, completing financial counselling or education programs, or providing additional disclosure about assets or transactions.

The court sets conditions based on the bankrupt’s ability to comply and the seriousness of the issues that led to the opposition. Conditions must be reasonable and achievable, considering the bankrupt’s financial circumstances.

For bankrupt individuals, conditional discharge means either fulfilling some of the normal duties of the bankrupt yet to be completed, or additional obligations beyond the normal bankruptcy requirements. However, once conditions are met, they receive the same debt relief as an absolute discharge.

Trustees play a crucial role in monitoring compliance with discharge conditions. They must verify that conditions have been satisfied before the discharge becomes effective and report to the court if the bankrupt fails to comply.

Unsecured creditors may benefit from conditional discharge orders, particularly if the conditions involve payments to the estate. These additional recoveries can increase dividend distributions to creditors.

Suspended Discharge: Waiting for the Right Time

A suspended discharge delays the effective date of discharge for a specified period. During the suspension period, the bankrupt remains in bankruptcy status and is subject to all associated restrictions and obligations.

Courts typically order suspended discharge when they want to monitor the bankrupt’s conduct for a longer period or when circumstances suggest that immediate discharge would be inappropriate.

The suspension period can range from one day to a few months to several years, depending on the severity of the issues and the court’s assessment of how long monitoring is necessary.

During the suspension period, the bankrupt must continue complying with all bankruptcy obligations. They cannot obtain certain types of credit, serve as a corporate director, or engage in other activities restricted during bankruptcy.

For trustees, suspended discharge means continued involvement in monitoring the bankrupt’s compliance. The trustee remains responsible for supervising the bankrupt throughout the suspension period.

Unsecured creditors gain additional protection through suspended discharge, as it extends the period during which the bankrupt’s activities are subject to oversight and restriction.

Refused Discharge: The Most Serious Consequence

In the most serious cases, courts may refuse to grant discharge altogether. This outcome is reserved for situations involving significant misconduct, fraud, or complete failure to comply with bankruptcy obligations.

When discharge is refused, the bankrupt remains permanently subject to bankruptcy restrictions unless they successfully apply for discharge in the future after addressing the court’s concerns.

Refused discharge is rare but serves as an important deterrent against abuse of the bankruptcy system. It ensures that those who act dishonestly or refuse to cooperate cannot simply walk away from their obligations.

For bankrupt persons, a refused discharge means they cannot achieve the fresh start that bankruptcy typically provides. They remain liable for their pre-bankruptcy debts and are subject to bankruptcy restrictions indefinitely.

Trustees have an obligation to bring on the bankrupt’s first application for discharge. When a discharge is refused by the court, the trustee normally then will go through the final steps to obtain the trustee’s discharge. If one day the bankrupt wishes to get their discharge from bankruptcy, the person must retain insolvency legal counsel to apply to the court for their application to be heard. The undischarged bankrupt will also need to pay a fee to the trustee for the trustee to review its records and participate in the bankrupt’s application hearing.

Unsecured creditors retain their rights to pursue collection against a bankrupt whose discharge has been refused, though the practical ability to collect may still be limited by the bankrupt’s financial circumstances. Once the trustee obtains its discharge, the stay of proceedings which prevented unsecured creditors from taking legal action against the bankrupt evaporates.

Factors Courts Consider When Determining Discharge Type

Courts consider numerous factors when deciding what type of discharge to grant in opposition cases. The bankrupt’s conduct before, during and after bankruptcy is paramount, including their honesty, cooperation with the trustee, and compliance with statutory obligations.

The nature and extent of any misconduct also influence the court’s decision. Technical violations may result in minor conditions, while fraudulent conduct could lead to suspended or refused discharge.

The bankrupt’s ability to comply with potential conditions is another important consideration. Courts won’t impose conditions that are impossible to meet, as this would effectively amount to refusing discharge.

The impact on creditors and the integrity of the bankruptcy system are also weighed. Courts must balance the bankrupt’s right to a fresh start with the need to maintain public confidence in the bankruptcy process.

The Official Receiver’s Role in the Discharge Process

The Official Receiver plays a central role in overseeing bankruptcy discharges in Canada. This government official reviews each bankruptcy file to ensure the bankrupt has complied with their obligations under the Bankruptcy and Insolvency Act.

When there are concerns about the bankrupt’s conduct, the Official Receiver has the authority to oppose the discharge by filing the prescribed Form 80.

The Official Receiver’s opposition typically focuses on ensuring the bankrupt has fully disclosed their assets, cooperated with the trustee, and met all statutory requirements. This oversight helps maintain public confidence in the bankruptcy system by ensuring dishonest consumer debtors cannot abuse it.

The Purpose of a Notice of Opposition

The Form 80 Notice of Opposition To Discharge Of Bankrupt serves several important purposes within the bankruptcy system. First, it provides a formal mechanism for raising concerns about a bankrupt’s conduct or compliance with their obligations.

Second, it ensures that discharge decisions receive proper judicial review when there are legitimate concerns. Rather than allowing potentially problematic discharges to proceed automatically, the opposition process brings these matters before a judge who can examine the evidence and make an appropriate ruling.

Third, the opposition process serves as a deterrent against abuse of the bankruptcy system. Knowing that creditors, trustees, and the Official Receiver can oppose discharge encourages bankrupts to be honest and cooperative throughout the process.

Finally, the opposition process protects the rights of creditors who may have been harmed by fraudulent or dishonest conduct. It ensures these concerns can be formally addressed before the bankrupt receives the benefit of discharge.

Who Can File a Notice of Opposition (Form 80)?

Understanding who has the legal authority to file a prescribed Form 80 Notice of Opposition To Discharge Of Bankrupt is crucial for anyone involved in the bankruptcy process. The Bankruptcy and Insolvency Act sets out specific rules about who can raise objections to a bankrupt’s discharge.

Understanding the Parties Involved: Creditors and the Trustee

In any bankruptcy proceeding, there are several key parties who may have an interest in the bankrupt’s discharge. Creditors are individuals or companies who were owed money by the bankrupt at the time of filing. These parties have a direct financial interest in ensuring the bankruptcy process is conducted properly and honestly.

The licensed insolvency trustee (formerly called a bankruptcy trustee) (LIT) is the licensed insolvency professional appointed to administer the bankruptcy estate. Trustees have a duty to creditors and the court to ensure the bankrupt complies with all obligations and that the estate is properly administered. This fiduciary responsibility gives trustees both the authority and obligation to oppose discharge when appropriate.

The Official Receiver, as mentioned earlier, represents the public interest in ensuring the proper administration of the bankruptcy insolvency process. As a government official, the Official Receiver has broad authority to oppose discharges that may undermine public confidence in the system.

Each of these parties brings different perspectives and concerns to the discharge process. Creditors focus primarily on protecting their financial interests and ensuring they haven’t been harmed by fraudulent conduct. Trustees consider broader compliance issues and proper estate administration. The Official Receiver looks at systemic concerns and adherence to statutory requirements.

Eligibility Criteria for Filing an Opposition

The Bankruptcy and Insolvency Act sets out specific criteria for who may file a Form 80 Notice of Opposition To Discharge Of Bankrupt. Generally, any creditor who has proven their claim in the bankruptcy is entitled to file an opposition. This includes both secured and unsecured creditors, provided they have followed proper procedures to establish their claim against the estate.

The LIT always has the authority to file an opposition when they identify concerns about the bankrupt’s conduct or compliance. This authority stems from the trustee’s statutory duties and fiduciary obligations to the estate and its creditors.

The Official Receiver also has broad authority to oppose discharge in appropriate circumstances. This authority is not limited to specific types of concerns but encompasses any situation where the Official Receiver believes opposition serves the public interest.

It’s important to note that the right to file an opposition is not unlimited. The party filing must have legitimate grounds based on the bankrupt’s conduct or non-compliance with statutory obligations. Frivolous or vexatious oppositions may be dismissed by the court and could result in cost awards against the opposing party.

The Bankrupt’s Own Position: Can a Bankrupt Oppose Their Own Discharge?

While it might seem counterintuitive, there are rare circumstances where a bankrupt person might want to delay their own discharge. For example, if the bankrupt discovers additional assets or income that should be disclosed to their LIT, they might prefer to address these issues properly before seeking discharge.

However, the more common situation is that bankrupts strongly desire to obtain their discharge as quickly as possible. From the bankrupt’s perspective, the Form 80 Notice of Opposition To Discharge Of Bankrupt represents a significant obstacle that could delay their fresh start and continue the restrictions of bankruptcy status.

When facing an opposition, bankrupts have the right to respond and defend against the allegations. They can present evidence, call witnesses, and make legal arguments about why the opposition should be dismissed or why any conditions imposed should be minimal.

The court will consider all evidence from both sides before deciding on the discharge. This adversarial process helps ensure that discharge decisions are fair and based on complete information about the bankrupt’s conduct and circumstances.

Form 80 Notice of Opposition To Discharge Of Bankrupt guide showing a split image of a depressed woman with too much debt and the other image is the same happy woman after receiving her discharge from bankruptcy
notice of opposition

Form 80: The Notice of Opposition Prescribed Form Document

The Form 80 Notice of Opposition To Discharge Of Bankrupt is a specific legal document prescribed under the Bankruptcy and Insolvency Act. Understanding its requirements and proper completion is essential for anyone considering filing an opposition.

What is Form 80?

Form 80 is the prescribed form document used across Canada to formally oppose a bankrupt person’s discharge. It serves as the initiating document that brings the matter before the court and sets out the specific grounds for opposition.

The form is designed to provide a clear notice to all parties about the nature of the opposition. It must contain sufficient detail about the grounds for opposition to allow the bankrupt and their counsel to understand the case they need to meet.

Form 80 also serves an important administrative function by ensuring that opposition matters are properly tracked within the court system. The standardized format helps court staff process these matters efficiently and ensures nothing falls through the cracks.

The form must be filed within specific time limits set out in the Bankruptcy and Insolvency Act. Missing these deadlines can result in the loss of the right to oppose discharge, making timely and accurate completion crucial.

Essential Information Required in Form 80

Completing Form 80 properly requires careful attention to detail and accuracy. The form contains several sections that must be completed fully and correctly to ensure the opposition is valid and effective.

Bankrupt’s Name and Details

This prescribed form must include the full legal name of the bankrupt person exactly as it appears in the bankruptcy documents. This includes any aliases or business names used by the bankrupt. Accuracy is critical because errors in the bankrupt’s identification could invalidate the entire opposition.

The bankrupt’s address and other identifying information must also be included. This ensures proper service of documents and helps the court identify the correct bankruptcy proceeding.

Filing Party’s Name and Contact Information (Creditor or Trustee)

The party filing the Form 80 Notice of Opposition To Discharge Of Bankrupt must provide complete and accurate contact information. This includes their full legal name, address, telephone number, and email address if available.

If the filing party is represented by counsel, the lawyer’s information must also be included. This ensures that all future correspondence and court notices are properly directed.

For corporate creditors, the form must indicate the proper corporate name and the authority of the person signing on behalf of the corporation. This might require providing evidence of signing authority through corporate resolutions or other documentation.

Court and Division Information

The opposition must be filed in the proper court division where the bankruptcy proceeding is taking place. Form 80 requires specific information about the court location and the bankruptcy file number.

Getting this information correct is essential because filing in the wrong court division can cause significant delays and may invalidate the opposition. The trustee’s office can provide the correct court information if there is any uncertainty.

Specific Grounds for Opposition (Detailed Explanation)

This is perhaps the most critical section of Form 80. The filing party must clearly set out the specific grounds for opposing the bankrupt’s discharge. Vague or general allegations are not sufficient; the form must contain specific facts and legal grounds.

Each ground for opposition should be described in detail, including relevant dates, amounts, and circumstances. The more specific and detailed the grounds, the stronger the opposition will be and the better the court can understand the issues.

The grounds must relate to recognized legal bases for opposition under the Bankruptcy and Insolvency Act. Personal disputes or grievances that don’t relate to the bankrupt’s conduct during bankruptcy are not appropriate grounds for opposition.

Supporting Evidence or Statements

Form 80 must be supported by evidence that substantiates the grounds for opposition. This might include financial documents, correspondence, witness statements, or other relevant materials.

The evidence should be organized and clearly referenced in the form. Each piece of evidence should directly support one or more of the stated grounds for opposition.

Affidavit evidence may be required to support certain allegations, particularly those involving the bankrupt’s conduct or statements. These affidavits must be sworn before an authorized person and follow proper legal format requirements.

Prescribed Fees and Payment

Filing Form 80 Notice of Opposition To Discharge Of Bankrupt requires payment of the prescribed court fees. These fees vary by jurisdiction and are subject to change, so it’s important to confirm the current fee schedule with the court registry.

Payment methods accepted by the court vary by location but typically include certified cheques, money orders, or cash. Some courts may accept credit card payments or electronic transfers.

The opposition cannot proceed without proper payment of fees, so ensuring payment is included with the filing is essential. Fee waivers may be available in cases of financial hardship, but these require a separate application and approval.

The Importance of Accuracy and Completeness in Form 80

Accuracy and completeness in Form 80 cannot be overstated. Errors or omissions can result in the opposition being dismissed, delays in processing, or the loss of the right to oppose discharge altogether.

Courts take a strict approach to procedural requirements in bankruptcy matters. This means that technical errors, even if seemingly minor, can have serious consequences for the filing party’s case.

Before filing, it’s essential to carefully review every section of the form for accuracy. Having another person review the form can help catch errors that might be missed by the person who prepared it.

If errors are discovered after filing, it may be possible to amend the form, but this typically requires court approval and may cause delays. Prevention through careful initial preparation is far preferable to attempting corrections later.

Obtaining and Preparing Prescribed Form 80

Form 80 Notice of Opposition To Discharge Of Bankrupt can be obtained from several sources. Court registries typically have copies available, and many courts provide forms on their websites for downloading and printing.

The Office of the Superintendent of Bankruptcy also provides standardized forms that can be used across Canada. These forms are regularly updated to reflect changes in legislation and court requirements.

Legal stationers and trustee offices may also have copies of Form 80 available. However, it’s important to ensure that any form obtained is the current version, as outdated forms may not be accepted by the court.

When preparing the form, consider using legal assistance if the case is complex or if you’re unfamiliar with bankruptcy procedures. LITs and lawyers specializing in bankruptcy law can provide valuable guidance on proper completion and filing procedures.

Grounds for Opposing Discharge: Why a Creditor Might Object

Understanding the legal grounds for opposing a bankrupt’s discharge is crucial for creditors considering filing Form 80 Notice of Opposition To Discharge Of Bankrupt. The Bankruptcy and Insolvency Act sets out specific circumstances where opposition may be appropriate and successful.

The Bankruptcy and Insolvency Act provides the legal framework for opposing discharge applications. Section 173 specifically addresses circumstances where discharge may be refused, suspended, or granted subject to conditions.

The Act recognizes that discharge is not an absolute right but rather a privilege that must be earned through honest conduct and compliance with bankruptcy obligations. When a bankrupt fails to meet these standards, creditors and other interested parties have the right to bring these failures to the court’s attention.

The legal standard for opposition is not merely dissatisfaction with the bankruptcy outcome. Instead, there must be specific conduct or circumstances that justify court intervention in the discharge process.

Courts have developed extensive case law interpreting these statutory provisions, guiding what constitutes sufficient grounds for opposition and what remedies may be appropriate in different circumstances.

Common Grounds for Opposition:

Failure to Disclose Property

One of the fundamental obligations of any bankrupt person is to fully disclose all assets and property to their trustee. This includes not only obvious assets like bank accounts and real estate but also more complex items like pending legal claims, intellectual property, crypto or interests in trusts or estates.

When a bankrupt fails to disclose assets, it deprives creditors of recoveries they might otherwise receive. This conduct undermines the entire bankruptcy system and provides strong grounds for opposing discharge.

Common examples of non-disclosure include hidden bank accounts, undisclosed business interests, transferred assets, or failure to mention inheritance expectations. Even assets that might seem minimal can be significant in the context of a bankruptcy estate.

The key issue is not necessarily the value of the undisclosed property but the fact that the bankrupt attempted to hide it from creditors and the trustee. This dishonest conduct justifies court intervention in the discharge process.

Non-Compliance with Duties of the Bankrupt (e.g., providing information, books)

The Bankruptcy and Insolvency Act imposes specific duties on bankrupt persons throughout the bankruptcy process. These duties include attending meetings with the trustee, providing requested information, delivering books and records, and generally cooperating with the administration of the estate.

When a bankrupt fails to comply with these duties, it can significantly impair the trustee’s ability to properly administer the estate and investigate the bankrupt’s affairs. This non-compliance provides grounds for opposing discharge.

Common examples include failure to attend required meetings, refusing to provide financial records, failing to complete required forms or questionnaires, or generally being uncooperative with the trustee’s requests.

The extent and nature of the non-compliance matters. Minor delays or technical failures may not justify opposition, but systematic non-cooperation or refusal to comply with major obligations certainly would.

Fraudulent Transactions or Intent to Defraud

Fraudulent conduct represents one of the most serious grounds for opposing discharge. This can include transactions designed to defeat creditors, false statements about financial affairs, or other dishonest conduct related to the bankruptcy.

Fraudulent transactions might include transferring assets to family members for inadequate consideration, creating false debts to preferred parties, or disposing of assets without proper disclosure to the trustee.

Intent to defraud can be proven through the bankrupt’s actions and the circumstances surrounding them. Courts look at factors like the timing of transactions, the relationship between parties, the consideration paid, and the bankrupt’s knowledge of their financial difficulties.

Even unsuccessful attempts at fraud can provide grounds for opposition. The key is the bankrupt’s intent and conduct, not necessarily whether the fraudulent scheme succeeded.

Prior Bankruptcy or Insolvency Proceedings

A bankrupt’s history of previous insolvency proceedings can be relevant to their current discharge application. Multiple bankruptcies may suggest a pattern of financial irresponsibility or an abuse of the bankruptcy system.

The mere fact of previous bankruptcy is not automatically grounds for opposition, but it becomes relevant when combined with other factors like non-compliance or dishonest conduct.

Courts consider factors like the time between bankruptcies, the reasons for the repeat insolvency, and whether the bankrupt has learned from previous experiences and modified their behaviour accordingly.

Repeat bankruptcies may result in longer waiting periods before discharge or conditions being imposed to address underlying financial management issues.

Obtaining Credit Under False Pretenses

When a bankrupt has obtained credit through false or misleading statements, this provides strong grounds for opposing discharge. This is particularly relevant for credit obtained shortly before filing for bankruptcy.

False pretenses might include overstating income, understating debts, providing false employment information, or failing to disclose material changes in financial circumstances.

The creditor who provided credit based on false information may think that since they have a particularly strong position to oppose discharge, as the bankrupt’s dishonest conduct directly harmed them, they should. However, if they can prove the fraud in court, then that judgment they get will follow the person around for life, as certain debts arising from fraudulent conduct cannot be eliminated through a bankruptcy discharge.

So in that case, the creditor should obtain their fraud judgment and then hope the person gets their discharge from bankruptcy so that all or most other debts are discharged. The creditor whose judgment is based on fraud can then go after the person when they have amassed more assets and have less debt.

Courts take this ground seriously because it directly involves dishonesty toward creditors and undermines the trust that credit relationships require.

When considering whether to file Form 80 Notice of Opposition To Discharge Of Bankrupt, it’s important to evaluate whether the circumstances fit within these recognized legal grounds. Having legitimate grounds supported by evidence is essential for a successful opposition.

The consequences of filing an unfounded opposition can include cost awards against the filing party, so careful consideration of the merits is essential before proceeding.

Strategic Considerations for All Parties

Understanding the different types of discharge available helps all parties make informed decisions about opposition proceedings. Creditors can assess whether the potential outcomes justify the time and expense of filing Form 80 Notice of Opposition To Discharge Of Bankrupt.

Bankrupt persons can better understand the potential consequences of their actions and make informed decisions about how to respond to opposition proceedings.

Trustees can provide better advice to all parties by explaining the likely outcomes based on the specific circumstances of each case.

The discharge type ultimately determines how effectively the bankruptcy process achieves its goals of providing debt relief to honest debtors while protecting creditor interests and maintaining system integrity.

Form 80 Notice of Opposition To Discharge Of Bankrupt guide showing a split image of a depressed woman with too much debt and the other image is the same happy woman after receiving her discharge from bankruptcy
notice of opposition

Frequently Asked Questions About Form 80 Notice of Opposition To Discharge Of Bankrupt

What is Form 80 Notice of Opposition To Discharge Of Bankrupt?

Form 80 Notice of Opposition To Discharge Of Bankrupt is the official legal document used in Canada to formally oppose a bankrupt person’s application for discharge from bankruptcy. This form allows creditors, trustees, or the Official Receiver to bring concerns about the bankrupt’s conduct or compliance before the court.

The form serves as the starting point for court proceedings that can delay, condition, or even prevent a bankrupt’s discharge. It must contain specific information about the grounds for opposition and be filed within strict time limits.

How much does it cost to file Form 80 Notice of Opposition To Discharge Of Bankrupt?

The cost to file Form 80 Notice of Opposition To Discharge Of Bankrupt varies by court jurisdiction as court filing fees. Additional costs may include legal representation, which can range from $2,000 to $10,000 depending on the complexity of the case.

Some courts may waive fees in cases of financial hardship, but this requires a separate application. It’s important to confirm current fee schedules with your local court registry before filing.

Who can file Form 80 Notice of Opposition To Discharge Of Bankrupt?

Several parties have the legal right to file Form 80 Notice of Opposition To Discharge Of Bankrupt. Proven creditors who have filed claims in the bankruptcy can file an opposition if they have valid grounds. The LIT administering the bankruptcy estate also has the authority to file opposition when they identify compliance issues.

The Official Receiver, representing the public interest, can file an opposition in appropriate circumstances. However, not everyone can file – the party must have standing and legitimate grounds based on the bankrupt’s conduct or non-compliance with statutory obligations.

What are the time limits for filing Form 80 Notice of Opposition To Discharge Of Bankrupt?

Time limits for filing Form 80 Notice of Opposition To Discharge Of Bankrupt are strictly enforced under the Bankruptcy and Insolvency Act. Generally, opposition must be filed no later than one month before the automatic discharge date or within the time specified in discharge application notices.

For first-time bankrupts, this typically means filing within eight months of the bankruptcy date. Missing these deadlines usually results in losing the right to oppose discharge, making timely action crucial.

Can a bankrupt person defend against Form 80 Notice of Opposition To Discharge Of Bankrupt?

Yes, bankrupt persons have the right to defend against Form 80 Notice of Opposition To Discharge Of Bankrupt. They can file responding materials, present evidence, call witnesses, and make legal arguments about why the opposition should be dismissed.

The court process is adversarial, meaning both sides present their case before a judge makes a decision. Bankrupts often benefit from legal representation when defending against opposition, especially in complex cases involving allegations of fraud or serious misconduct.

What happens after the the Form 80 Notice of Opposition To Discharge Of Bankrupt is filed?

After Form 80 Notice of Opposition To Discharge Of Bankrupt is filed, the court schedules a hearing where all parties can present evidence and arguments. The bankrupt person receives notice of the opposition and has the right to respond.

The hearing process can take several months to complete, during which the bankrupt remains in bankruptcy status. The judge will review all evidence before deciding whether to grant absolute discharge, conditional discharge, suspended discharge, or refuse discharge altogether.

How long does the Form 80 Notice of Opposition To Discharge Of Bankrupt process take?

The Form 80 Notice of Opposition To Discharge Of Bankrupt process typically takes three to twelve months from filing to final court decision. Simple cases with straightforward issues may resolve more quickly, while complex cases involving extensive evidence or multiple parties can take longer.

Factors affecting the timeline include court scheduling, the complexity of issues raised, the amount of evidence to review, and whether the parties reach any settlement agreements before the hearing.

What evidence is needed for Form 80 Notice of Opposition To Discharge Of Bankrupt?

Evidence for Form 80 Notice of Opposition To Discharge Of Bankrupt must directly support the specific grounds for opposition stated in the form. This might include financial documents showing undisclosed assets, correspondence demonstrating non-cooperation with the trustee, or records proving fraudulent transactions.

Witness statements, expert reports, and documentary evidence should be organized clearly and referenced specifically in the opposition form. Affidavit evidence may be required for certain types of allegations, particularly those involving the bankrupt’s conduct or statements.

Can Form 80 Notice of Opposition To Discharge Of Bankrupt be withdrawn?

Yes, Form 80 Notice of Opposition To Discharge Of Bankrupt can be withdrawn by the filing party at any time before the court makes its final decision. Withdrawal typically requires filing a formal notice with the court and serving it on all parties.

Parties might withdraw opposition if the bankrupt addresses their concerns, new evidence emerges that undermines their case, or they reach a settlement agreement. However, withdrawal doesn’t guarantee the court won’t consider the issues raised if other parties maintain their opposition.

What are the most common grounds for filing Form 80 Notice of Opposition To Discharge Of Bankrupt?

The most common grounds for filing Form 80 Notice of Opposition To Discharge Of Bankrupt include failure to disclose assets or property to the trustee, non-compliance with statutory duties like attending meetings or providing information, and fraudulent transactions designed to defeat creditors.

Other frequent grounds include obtaining credit under false pretenses before bankruptcy, having previous bankruptcy or insolvency proceedings, and general lack of cooperation with the trustee’s administration of the estate.

How does Form 80 Notice of Opposition To Discharge Of Bankrupt affect credit rebuilding?

Form 80 Notice of Opposition To Discharge Of Bankrupt significantly delays credit rebuilding because it prevents or delays the bankrupt’s discharge. Without discharge, the person remains in bankruptcy status and cannot begin the credit rebuilding process.

Even after resolving opposition proceedings, the bankruptcy remains on credit reports for six to seven years from the discharge date. Conditional or suspended discharges may create additional reporting that further impacts credit scores and lending decisions.

Can multiple parties file Form 80 Notice of Opposition To Discharge Of Bankrupt for the same bankrupt?

Yes, multiple parties can file separate Form 80 Notice of Opposition To Discharge Of Bankrupt documents against the same bankrupt person. Each opposition is treated as a separate proceeding, though courts often consolidate hearings for efficiency.

Multiple oppositions can strengthen the overall case against discharge, especially if different parties raise complementary concerns about the bankrupt’s conduct. However, each filing party must have their own valid grounds and standing to oppose.

What role does the LIT play in Form 80 Notice of Opposition To Discharge Of Bankrupt cases?

Licensed insolvency trustees play multiple roles in Form 80 Notice of Opposition To Discharge Of Bankrupt cases. They may file opposition themselves when they identify compliance issues or misconduct during estate administration.

When other parties file opposition, trustees often provide evidence about the bankrupt’s compliance with statutory duties, cooperation levels, and any issues discovered during estate administration. Trustees must remain neutral and focus on factual evidence rather than advocacy for any particular outcome.

How much can a conditional discharge cost under Form 80 Notice of Opposition To Discharge Of Bankrupt proceedings?

Conditional discharge costs resulting from Form 80 Notice of Opposition To Discharge Of Bankrupt proceedings vary widely based on the bankrupt’s circumstances and the severity of issues raised. Payments to the estate can range from a few thousand dollars to tens of thousands of dollars.

Courts consider the bankrupt’s ability to pay when setting conditions, but also weigh the seriousness of misconduct and the benefit to creditors. Monthly payment plans over several years are common when lump sum payments aren’t feasible.

What happens if a bankrupt violates conditions set after Form 80 Notice of Opposition To Discharge Of Bankrupt proceedings?

If a bankrupt violates conditions set after Form 80 Notice of Opposition To Discharge Of Bankrupt proceedings, the trustee must report the violation to the court. This can result in the discharge being revoked or additional conditions being imposed.

Notice of Opposition Conclusion

The path to financial freedom in Canada’s current economic climate may be challenging, but it is not impossible. With the right information, a clear plan, and professional guidance, you can overcome your cost of living and debt challenges and move towards a more secure and hopeful financial future.

You’re not alone in this. There’s a path forward, and it starts with reaching out for the right kind of help. Take that step—you deserve it. If you’re a GTA resident dealing with overwhelming debt, don’t wait for your credit situation to get worse. As a licensed insolvency trustee serving Toronto, Mississauga, Brampton, Markham, and surrounding areas, I’m here to help you understand your options.

Free consultation available:

  • No obligation to proceed
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  • Clear explanation of how debt solutions affect your Equifax credit score
  • Practical next steps you can take immediately

Remember: Your current financial situation doesn’t define your future. With the right help and information, you can overcome both debt challenges and credit score problems.

As a licensed insolvency trustee serving the Greater Toronto Area, I encourage consumers and business owners to view financial difficulties not as failures but as challenges that can be addressed with proper guidance. By understanding the warning signs of insolvency and seeking professional advice early, many people and businesses can find a path forward – whether through restructuring, strategic changes, or in some cases, an orderly wind-down that protects their future opportunities.

Remember: The earlier you seek help for company insolvency concerns, the more options you’ll have.

If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance. As a licensed insolvency trustee serving the Greater Toronto Area, I help entrepreneurs understand their options and find a path forward during financial challenges.

At the Ira Smith Team, we understand the financial and emotional components of debt struggles. We’ve seen how traditional approaches often fall short in today’s economic environment, so we focus on modern debt relief options that can help you avoid bankruptcy while still achieving financial freedom.

The stress of financial challenges can be overwhelming. We take the time to understand your unique situation and develop customized strategies that address both your financial needs and emotional well-being. There’s no “one-size-fits-all” approach here—your financial solution should be as unique as the challenges you’re facing.

If any of this sounds familiar and you’re serious about finding a solution, reach out to the Ira Smith Trustee & Receiver Inc. team today for a free consultation. We’re committed to helping you or your company get back on the road to healthy, stress-free operations and recover from financial difficulties. Starting Over, Starting Now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.

Form 80 Notice of Opposition To Discharge Of Bankrupt guide showing a split image of a depressed woman with too much debt and the other image is the same happy woman after receiving her discharge from bankruptcy
notice of opposition
Categories
Brandon Blog Post

DISCHARGE FROM BANKRUPTCY CANADA: OUR DETAILED STEP-BY-STEP GUIDE

What are the implications of discharge from bankruptcy Canada?

If you are experiencing financial troubles and can’t pay your debts, you can file for bankruptcy in Canada. This legal process lets you off the hook for your debts and start fresh. Once you’re discharged from bankruptcy, you’re no longer responsible for those debts (other than for a few exceptions noted below). Filing for bankruptcy is stressful. We understand how difficult and stressful the bankruptcy process can be, so we hope that this will be a helpful resource for you.

Once the Trustee has completed their duties under the Bankruptcy and Insolvency Act (Canada) with respect to the administration of your property and the bankruptcy estate, the next step in the bankruptcy process is they must apply for a discharge. This will occur after the Trustee has applied for your discharge from bankruptcy Canada, even if you did not get an absolute discharge.

This Brandon’s Blog is for people who have made a bankruptcy filing but have not yet been discharged. If your Licensed Insolvency Trustee has been discharged or is otherwise unable to help you with a second discharge application, this blog will provide you with the information you need to get through the process on your own.

Discharge from bankruptcy Canada: What are the implications if you are not discharged from bankruptcy?

If your previous application for discharge was unsuccessful, you remain an undischarged bankrupt and your Trustee is not obliged to make another application on your behalf. However, you should check with your Trustee first as they may or may not be prepared to do so.

We often receive calls from individuals who claim that their Trustee has been discharged, but they have not been. They express confusion as to why their Licensed Insolvency Trustee will not make an application for their discharge from bankruptcy. A quick search reveals that in these cases, the individual received a conditional discharge, but has not yet fulfilled all of their conditions to get a bankruptcy discharge. That is why their conditional discharge has not yet been converted into an absolute discharge.

If you filed an assignment in bankruptcy and are still an undischarged bankrupt, you may be able to apply for discharge from bankruptcy. An insolvency Trustee only needs to make one application on your behalf. Once the Trustee obtains their discharge, they do not need to make your application for discharge on your behalf again.

The Licensed Trustee cannot be discharged until all bankruptcy administration requirements have been met, including making the first discharge application on behalf of the bankrupt person.

discharge from bankruptcy canada
discharge from bankruptcy canada

Discharge from bankruptcy Canada: How do you obtain a bankruptcy discharge in Canada?

Automatic discharge from bankruptcy is typically granted unless there are exceptional circumstances. If there is opposition to the automatic discharge, the discharge application must be brought before the court for a hearing.

If you did not complete all of your bankruptcy duties as the bankrupt person, such as providing income and expense statements, attending required financial counselling sessions, and/or paying surplus income, your Trustee had reasons to oppose your automatic discharge and scheduled a hearing with the court.

The Report of Trustee on Bankrupt’s Application for Discharge sets out the reasons for the insolvency Trustee’s opposition to a bankrupt’s application for discharge. This document is on file with the court.

If a bankrupt does not receive a discharge at the time of the court application, it is usually because they have not yet done what is required. The associate justice/registrar who heard the application at court may have therefore adjourned the application (i.e. stated it was to be heard at a later date, which may or may not have been set).

The court may have adjourned your discharge application or imposed conditions that must be met before you are entitled to a discharge. The disposition sheet from the hearing will state what the court decided in this regard.

Discharge from bankruptcy Canada: What are the steps to clear my bankruptcy?

It’s not unusual for people who didn’t do what they were supposed to at first to try and get back on track and do what’s required to get their discharge. You must comply with your duties during bankruptcy to the best of your ability and be prepared to explain to the court any deficiency in doing so.

For example, to get your discharge, you must be able to provide details and evidence of your income and expenses during bankruptcy. You probably recall that you were required to provide the Trustee with your monthly income and expense reports. If you’re unable to provide the court with those details, the court may want to review your income tax returns for that period. If you want the court to rescind or vary the conditions imposed, you must show that you complied with the conditions to the best of your ability.

There are many examples of trying your best to meet the conditions but maybe not perfectly. If the court orders you to pay a certain sum of money to the Trustee by a certain date, you can make the court-ordered additional payment but not by the specified date. If you were required to make surplus income monthly payments but didn’t make them all, that’s one reason there were conditions attached to your discharge. You can apply to the court to change the date and get your discharge.

Another one is that you didn’t finish all your required credit counselling sessions. You could finish them and then provide proof of completion to the court.

discharge from bankruptcy canada
discharge from bankruptcy canada

Completing your own application for discharge from bankruptcy Canada

Making your own application to be discharged from bankruptcy can be a bit daunting, but don’t worry—just follow a few simple steps and you’ll be all set. Here are some tips to help you get your application ready and submitted without the help of a bankruptcy trustee or a bankruptcy lawyer.

To begin, you’ll want to locate your bankruptcy file at the court office. Once you have your file, be sure to look through it thoroughly to find:

  • your bankruptcy court file number;
  • the Report of Trustee on the Bankrupt’s Application for Discharge under section 170 of the BIA;
  • any order issued by the bankruptcy court at the original discharge hearing; and
  • the court’s disposition sheet from any previous discharge hearing identifies what the court previously ordered or decided.

You will need copies of these documents. You can ask the court office to make copies for you. They will charge you a fee for photocopying. You should check the Report of the Trustee, the court’s disposition sheet, and any court order to see what you failed to do and what conditions the court has imposed. Also, it is not a bad idea to find out who attended your last application for discharge.

You should check the Report of the Trustee, the court’s disposition sheet, and any court order(s) in the file to see what you didn’t do and what conditions (if any) the court has imposed. Lastly, you need to schedule a date for your discharge hearing with the bankruptcy court.

You will be required to prepare the following documents and file them with the court:

  • a notice of hearing for a bankrupt person’s application for discharge;
  • your affidavit explaining why you believe you are entitled to the discharge order sought;
  • an affidavit of service; and
  • a draft of the order sought.

The Associate Justice/Registrar in Bankruptcy hearing your application for discharge may make any order he or she sees fit. If the order you are seeking is made, he or she may accept and sign it in court on the day you appear, which may save you a period of time later on.

Requisition – Notice of hearing for bankrupt’s discharge from bankruptcy Canada hearing for discharge

The first step in obtaining a discharge in bankruptcy is to file a Notice of Hearing for Bankrupt’s Application for Discharge with the court. That document would have first been filed by the Trustee when the Application for discharge is first scheduled. If you have a copy of it, it will be a good precedent for you to follow.

A requisition must be filed again by you in order to have the matter brought back before the court.

discharge from bankruptcy canada
discharge from bankruptcy canada

Discharge from bankruptcy Canada:The Affidavit

An affidavit is a formal, written statement that provides key information in your legal case. Any evidence you want the court to consider in your application must be submitted in an affidavit. Your affidavit should describe the events leading up to your bankruptcy, and your current financial situation.

You must swear or affirm your affidavit before a notary public or commissioner of oaths. Make sure that your affidavit only includes evidence that is relevant to your application for discharge.

The court is familiar with a standard form of affidavit for discharge applications. You should familiarize yourself with that normal format. You should also include:

  • additional information about why you did not seek a bankruptcy discharge earlier;
  • is this a 1st-time bankruptcy, 2nd-time bankruptcy or more;
  • why you have not been able to comply with the bankrupt’s duties or the requirements of an earlier court order; and
  • state the reasons you are wanting to be discharged now.

You will need to attach any relevant documents to your affidavit in support of your application, including a statement of your current income, expenses, assets, liabilities and any previous bankruptcy information.

Discharge from bankruptcy Canada:Affidavit of Service

To serve documents, you must provide a written copy to the party to be served. You need to obtain a signature or other confirmation, such as an email, to confirm that the document was properly served. You will need to serve the filed Requisition and all filed Affidavits and documents on:

These parties may attend your hearing and make submissions.

In order to provide proper service within the required time period before your discharge hearing, you must familiarize yourself with the rules. You must also provide proof of service at the hearing, especially if no one else attends. This proof of service can be the signature of everyone served to show the date they were served.

An Affidavit of Service can also be filed with the court. This Affidavit of Service is separate from the Affidavit filed with the court regarding your reasons for entitlement to anabsolute bankruptcy discharge certificate.

discharge from bankruptcy canada
discharge from bankruptcy canada

At the discharge from bankruptcy Canada hearing

When you appear in court for your discharge hearing, you will be able to present your case to either an Associate Justice or Registrar in Bankruptcy. If your application is being opposed, the creditors opposing your discharge need to file a notice of opposition. In this case, the hearing will be in front of a bankruptcy Judge. This is the normal process followed:

  1. You explain why you believe you are entitled to the order you are seeking, for example, an absolute discharge from bankruptcy.
  2. Anyone opposing your application explains his or her position.
  3. The Judge or Registrar may ask questions relating to the affidavits and documents you have filed and make suggestions or give directions.

When presenting your position at the hearing, remember to:

  1. Clearly state what order you are seeking from the Registrar in Bankruptcy or Judge.
  2. Outline the facts supporting your application in a concise manner.
  3. Explain the law on the subject and how it applies to the facts of your case.

Your conduct before and during bankruptcy will be taken into consideration when making a decision on your application for discharge. The Trustee’s report will provide information on your conduct before and during bankruptcy, which will be taken into account. if you did not attend the required financial counselling
sessions, did not file required statements of income and expense, and/or did not make the required surplus income payments to the Trustee for the benefit of your creditors.

The court will consider the relevant factors and make the appropriate order, or it may adjourn the hearing for further information or conditions to be met. Some of the types of orders the court may make are:

  • An order of discharge that is absolute and therefore you are immediately discharged from bankruptcy.
  • A conditional discharge may be granted. Examples of conditions are:
    • if the debtor pays any unpaid surplus income,
    • the debtor pays the outstanding balance for any asset that was agreed to be paid for; or
    • if the debtor pays a sum of money to the Trustee toward their debt obligations, as decided by the court.
  • A discharge that has been suspended.
  • The court may refuse to issue a discharge order if it is not satisfied that you have made full and adequate disclosure, or if there are issues with your conduct.

Discharge from bankruptcy Canada: Order for discharge

The Judge or Registrar in Bankruptcy will grant a discharge order at the end of the hearing. The type of discharge will be one of the kinds indicated above. If you prepared a draft order and the Registrar in Bankruptcy or Judge finds it acceptable, they will sign it and you can then have it filed with the court. However, if your application was opposed, keep in mind that one of the opposing parties may choose to appeal the discharge order.

If you have not prepared your order before the hearing, you should do so after the hearing and submit the order in duplicate to the court. The court office will then send the order to the Registrar in Bankruptcy or Judge who heard your application for signing. Once you receive your copy of the signed order, your discharge will be official.

When you receive a copy of the signed order, you must provide a copy to the Office of the Superintendent of Bankruptcy. They will in turn notify the credit bureaus and Canada Revenue Agency of your discharge.

When you have received your absolute discharge, you are no longer legally responsible for repaying debts that you incurred before your assignment in bankruptcy. You will get rid of debt with some exceptions set out in Section 178 of the Bankruptcy and Insolvency Act. They are:

  • payment of child support or alimony;
  • student loans, if you have not been a full-time or part-time student for less than 7 years;
  • a fine or penalty imposed by the court; or
  • debt resulting from fraud.

    discharge from bankruptcy canada
    discharge from bankruptcy canada

Discharge from bankruptcy Canada: Are you tired of being in debt?

Bankruptcy law and the bankruptcy process can be complex, so it may be worth retaining a bankruptcy lawyer to help you apply for your discharge. Ultimately, it is up to you, but hopefully, this guide to discharge from bankruptcy Canada will lay out the steps you need to take if you wish to apply for a discharge yourself.

I hope that you found this discharge from bankruptcy Canada Brandon’s Blog informative. If you’re sick and tired of carrying the burden of debt and ready to live a much better life, we can assist. We know exactly how it really feels to be in debt as well as feel like you’re never going to get ahead. We have actually helped lots of people and businesses that were in your position reach financial stability, so we understand it’s feasible for you to prosper in your objective of ending up being debt-free. Nevertheless, it will certainly require some work on your part. We’ll be right here to assist you with every action necessary.

The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too many personal unsecured debts, Credit card debt, income tax debt liability, unsecured loans or personal obligations from the running of your company or from being a business owner. These are all types of debt we can help you eliminate. We are aware of your financial difficulties and understand your concerns. Filing bankruptcy is the last option we explore only after we have exhausted all other options to avoid bankruptcy, such as financial restructuring through a debt repayment plan.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to give you the best management advice to get you out of your outstanding debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We are sympathetic to the financial difficulties you are experiencing and would like to help alleviate your concerns. We want to lighten your load by coming up with a debt settlement plan crafted just for you.

We realize that people and businesses in financial difficulty need practical advice and a workable solution in an easy-to-understand financial plan. The Ira Smith Team knows that not everyone has to file for bankruptcy in Canada. Most of our clients never do, as we are familiar with alternatives to bankruptcy. We assist many people in finding the relief they need.

Call or email us. We would be happy to give you a no-cost initial consultation. We can find you the perfect solution to tailor a new debt restructuring procedure specifically for you, based on your unique economic situation and needs. We provide a full range of services to people and companies. If any of this sounds familiar to you and you’re serious about finding a solution, let us know. We will get you back to living a happy life, whether or not there is an economic recession in Canada.

Call us now for a no-cost initial consultation. We are licensed professionals.

discharge from bankruptcy canada
discharge from bankruptcy canada
Categories
Brandon Blog Post

BANKRUPTCY DISCHARGE: MY CHEAT-SHEET OF THE TOP 8 THINGS THE BANKRUPTCY COURT CONSIDERS

Bankruptcy discharge introduction

A bankruptcy discharge is when the bankrupt is released under Canadian bankruptcy law from his or her debts as part of the bankruptcy process. Some people think that it is the act of filing bankruptcy that releases the bankrupt from liability. This is not the case. It is the discharge from bankruptcy process that “discharges” the bankrupt’s debts.

We explain in this vlog the procedure when a bankrupt’s outright discharge is opposed. We discuss the top 8 things that the Bankruptcy Court will consider in determining just what outcome the bankrupt could expect.

The primary benefit of the bankruptcy process for the insolvent person

The bankruptcy discharge is among the primary benefits of relief under the Bankruptcy and Insolvency Act (Canada) (BIA). The discharge is vital to the bankruptcy process. Debtors, after bankruptcy, can wipe the slate clean and start over, which is a central principle under the BIA statute.

Not all debts may be released

A bankruptcy discharge offers the discharge of many unsecured debts. Credit card debts, personal income tax debt, unsecured personal loans and under certain conditions, some student loan debt are all dischargeable debts. Financial debts, which will not be discharged include:

  • support payments to a previous spouse or to children;
  • fines or financial charges imposed by the Court;
  • debts emerging from fraudulent behaviour;
  • student loans if fewer than seven years have passed considering that the bankrupt quit being a full or part-time student.

    ontario bankruptcy court discharge certificate
    bankruptcy discharge

It can be opposed

An insolvent’s bankruptcy discharge application may be opposed by one or more unsecured creditors or the Licensed Insolvency Trustee (formerly called a bankruptcy trustee) (LIT). A creditor opposition is created when the creditor files the required notice of opposition, setting out the reasons for opposing.

This happens if the insolvent has not met all of his/her responsibilities under the BIA. Making full disclosure, attending the required two financial counselling sessions and making all necessary surplus income payments are all duties of the bankrupt that must be fulfilled if a discharge is to be considered.

It can also happen if the individual bankrupt has actually committed a bankruptcy offence. Those are acts listed in section 173 (1) of the BIA. In this case, there needs to be a bankruptcy discharge hearing in Court and the Court will after that evaluate the LIT or creditor opposition as well as give its decision on the discharge from personal bankruptcy.

There are four types of discharges possible

There are 4 types of discharges:

  1. Absolute discharge— The bankrupt is launched from the legal obligation to pay off financial obligations that existed on the day of bankruptcy, except for certain types of debt identified above.
  1. Conditional discharge— The bankrupt must fulfill certain conditions, additional payments into the bankruptcy estate, to get an absolute discharge. Once all conditions have been fulfilled, an absolute discharge will certainly be granted.
  1. Suspended discharge— An absolute discharge that will be granted at later on a specific date determined by the Court.
  1. Refused discharge— The Court has the right to decline a discharge.

If there is no opposition to the discharge from bankruptcy of the bankrupt by a creditor or the LIT, then the LIT is able to provide an automatic discharge by issuing the appropriate certificate. There is no need for attendance in Court.

after bankruptcy discharge canada
bankruptcy discharge

The opposition process

When a debtor’s bankruptcy discharge application is opposed by either an unsecured creditor or the LIT, the Trustee needs to secure a Court day. This will be for a Court hearing on the insolvent’s application for discharge. The LIT must then tell all creditors who have filed a proof of claim of the opposition. Details are also provided about the date, time as well as place of the Court hearing.

The Trustee needs to also file a report with the Court on the conduct of the bankrupt both prior to as well as after applying for bankruptcy. The report will as well give a summary of the financial results of the bankruptcy administration. If a creditor has opposed the bankrupt’s discharge, then that creditor likewise needed to send a notice of opposition.

Does the bankrupt need a lawyer on an opposed discharge?

When going to Court for his/her discharge application hearing, a bankrupt would be well advised to come with a skilled bankruptcy lawyer to represent his or her interests. Sometimes the discharge hearing is less formal than various other types of Court hearings.

However, the Court follows all the proper regulations of civil procedure. It is sometimes tough for nonprofessionals to put their best foot forward without an attorney’s aid.

There have been many Court cases on applications for discharge. A Court decision released recently from the Queen’s Bench of Saskatchewan supplies an exceptional walk-through of the points the Court will take into consideration. For those interested, the reference is Hertz Bankruptcy (Re), 2017 SKQB 224 (CanLII).

bankruptcy discharge 3
bankruptcy discharge

The top 8 things the Bankruptcy Court will consider

The concerns the Court thought about, in determining what type of bankruptcy discharge certificate to issue, which is the same in all bankruptcy discharge hearings, were:

  1. Do the conditions of the bankruptcy filing and the bankrupt’s conduct sustain an order discharging the Bankrupt’s unsecured debts?
  2. The Court’s problem is to make sure that within a choice the policy purposes of the BIA are fulfilled. The bankruptcy, including the insolvent’s discharge, should act as a deterrence for the person not to duplicate the very same behaviour.
  3. If the circumstances of the bankruptcy support an order discharging the bankrupt, what terms of discharge are proper under the distinct circumstances of the bankruptcy?
  4. What were the conditions of the insolvent when the debts were sustained?
  5. What efforts did the insolvent make to pay the creditors?
  6. Did the bankrupt pay in respect of certain other debts but not all of them and particularly not the debt of the opposing creditor?
  7. Exactly what are the insolvent’s monetary opportunities for the future?
  8. Is there any other conduct or reality that needs to be factored into with the regard to discharge?

The Court will take lots of variables into account. The conduct, previous income, education and age of the bankrupt are all important factors. The Court will certainly likewise trust the Trustee’s report to Court on the bankrupt’s application for discharge. The Trustee’s report assists in determining facts about the conduct of the insolvent and his or her future prospects.

bankruptcy discharge

Is the bankrupt young or old?

Prevention is always a consideration. It is however very important to remember that Courts tend to be extra conventional when dealing with older bankrupts. A more youthful bankrupt with years of income-making opportunities could be needed to make an extra significant repayment. Less respect is given to the instant ability to pay.

An older bankrupt with some surplus income but fewer working years might be needed to pay less surplus income obligations into the bankruptcy estate.

Bankruptcy discharge: Is my bankruptcy case over when I get a discharge?

You should by this point in my Brandon Blog realize that when you receive an absolute discharge from your bankruptcy, at that point, you are discharged from your unsecured debts.

A discharge shows that you have finished with your bankruptcy legal process and your personal liability for unsecured debts has ceased. It’s not a separate thing from bankruptcy; it happens either automatically or by an Order of the Court, as I have described above.

At that point, the LIT still has some duties to fulfill. They include:

  • if there is going to be a dividend paid to the creditors, making sure that all proofs of claim have been reviewed and allowed for dividend purposes;
  • resolve any uncertainties the LIT may have concerning certain filed bankruptcy claims, including the issuance of Notices of Disallowance if any;
  • preparing the bankruptcy administration Final Statement of Receipts and Disbursements;
  • getting approval from the Office of the Superintendent of Bankruptcy to the Final Statement
  • getting the Final Statement, including the LIT’s fee and disbursements, approved by the Court;
  • issuing the dividend bankruptcy payments, if any
  • getting the discharge of the LIT

It is then that your bankruptcy case is closed.

Bankruptcy discharge: Do you have too much debt and want to avoid bankruptcy?

Do you have too many debt obligations and debt payments and have no idea how to deal with them? Act before you find yourself in the throes of an emergency financial situation. Ira Smith Trustee & Receiver Inc. has assisted many Canadian businesses and people throughout the Greater Toronto Area (GTA) in dealing with debts that need a plan for Starting Over, Starting Now. Don’t postpone. Give us a call today. Financial problems can be solved while avoiding bankruptcy with timely activity as well as our excellent strategy tailored just for you.

bankruptcy discharge

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