Can A Creditor Delay My Discharge?

If:

• You owed money to CRA (Canada Revenue Agency) when you filed your bankruptcy; and 
• CRA has filed a claim with your trustee proving the amount of the debt; and
• CRA has legal grounds to oppose your discharge (these are set out in s. 173 of the Bankruptcy and Insolvency Act);

Because this is your second bankruptcy, there must be a court application for your discharge.  That hearing should normally be held between 9 and 12 months after you filed your bankruptcy.

If CRA or any other creditor is opposing your discharge, they will attend the hearing and tell the court why they don't think you should be discharged.

At the hearing, the court will listen to what the Trustee has to say, what CRA has to say, and (if you attend the hearing) what you have to say.  If the court is satisfied that the creditor doesn't have a valid reason for delaying your discharge, the court will give you a discharge.  Because this is your second bankruptcy, the courts can't give you an immediate discharge - they have to suspend (delay) it for some period of time (usually 3 to 6 months). 

However, if the court agrees with CRA that you aren't yet entitled to a discharge, the court will either delay your discharge until the issue is resolved, or make whatever other order the court feels is appropriate in the circumstances.  So, if CRA was opposing because you haven't paid taxes on self-employed income that you earned during your bankruptcy, the courts in BC will usually delay your discharge until you come back and show them that the taxes are paid.

So, CRA can't just delay your discharge on its own.  If they are opposing your discharge, the matter has to be decided by the court.  

I hope that helps.