Do You Have To Attend Court To Get Out Of Bankruptcy

Hello, In many instances a court hearing is not required for you to be discharged from bankruptcy. For example, a person who files for bankruptcy a first time is entitled to receive a Certificate of Discharge or “Automatic Discharge” from the Trustee at the expiration of nine months provided they have completed all requisite duties including but not limited to paying trustee fees, completing two debt counseling sessions, submitting monthly income and expenses forms, and providing the trustee with information to file your personal income tax return. Alternatively, if you have surplus income in accordance with Directive 11R2 of the Bankruptcy & Insolvency Act (BIA), you will be eligible for an automatic discharge after 21 months. What is surplus income? In summary, there is a “standard guideline” for income in bankruptcy based on the number of people in your household. If your income is higher than the “standard guideline” applicable to your family unit, a percentage of the amount above the guideline is paid into the bankruptcy estate on a monthly basis as a “surplus payment.” Based on recent changes to the BIA that came into effect on September 18, 2009, an individual filing for bankruptcy a second time will now be eligible for an automatic discharge after 24 months. This assumes you do not have surplus income and have completed all requisite duties. If you have surplus income in accordance with Directive 11R2 of the BIA, you will be eligible for an automatic discharge after 36 months. In summary, a court hearing for purposes of getting discharged from bankruptcy may be required if you have not completed the requisite duties in the allotted time frame depending on whether this is a first or second time bankruptcy. In addition, if you have income tax debt greater than $200,000 and which exceeds 75% of the total unsecured proven claims/debts, you would have to make a court application for discharge after 9 months (1st time bankrupt, no surplus), 21 months (1sttime, surplus), 24 months (2nd time, no surplus) or 36 months (2nd time, surplus). Brad Milne, CIRP Trustee in Bankruptcy Brandon, Manitoba