case studies,  personal bankruptcy

What happens if you file for bankruptcy but don’t complete it?

If you file for bankruptcy but don’t complete it, the Licensed Insolvency Trustee will be required to oppose your discharge from bankruptcy and will schedule a discharge hearing with the Bankruptcy Court.

You will be given notice of the discharge hearing date so you have the opportunity to attend the hearing and explain to the Court why you didn’t fulfill your obligations. The Court will issue one of the following Orders:

  1. You obtain an Absolute Discharge if the Court finds that you did nothing wrong.
  2. Your discharge is conditional upon you completing your obligations in your bankruptcy proceedings.
  3. If your conduct is especially egregious, your discharge shall be refused. If that happens, your creditors will be able to come after you again after your LIT closes your bankruptcy file.

If you don’t show up to your discharge hearing, the Court will issue a “No Order”. This means that because you failed to appear to the hearing and tell your side of the story, the Court cannot make any order.

If a “No Order” is issued, your LIT will close your bankruptcy file, after which your creditors will be able to come after you again.

It should be noted that you cannot file bankruptcy again until you’ve been discharged from your first bankruptcy. Therefore, if you don’t finish your bankruptcy and you get into financial trouble again after a few years, filing bankruptcy won’t be an option for you.

Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With many years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. so that he could dedicate his professional life to help people from all walks of life to deal with their debt.