How Long Does Bankruptcy Last?

How Long Will You Be Bankrupt?

In most circumstances a first time bankrupt will be eligible for discharge after nine months. How long your bankruptcy will last can be extended if you have been bankrupt before or you are required to pay surplus income.

The length of bankruptcy in Ontario is as follows:

  • A first time bankrupt with no surplus will be bankrupt for 9 months (unless opposed)
  • A first time bankrupt with surplus will be bankrupt for 21 months (unless opposed)
  • A second time bankrupt with no surplus will get an automatic bankruptcy discharge after 24 months (unless opposed)
  • A second time bankrupt with surplus will get an automatic discharge after 36 months (unless opposed)
  • If this is your third bankruptcy, you are not eligible for an automatic discharge. Your bankruptcy trustee will need to apply to the bankruptcy court for an application for discharge hearing.

What Does This Mean?

If you have net income of more than $200 over the government allowed threshold the length of your bankruptcy process will be extended for a further 12 months, and you will be required to continue to pay that surplus income into your bankruptcy estate for your creditors. A longer bankruptcy means extra payments which increases the cost of bankruptcy.

How long to discharge also depends on whether or not you have completed your duties. Failure to complete you duties will increase how long you will be bankrupt.

Consider Bankruptcy Alternatives

Talk to us if you think you might have to pay surplus income and additional bankruptcy payments over a longer period of time. An option may be to avoid bankruptcy by filing a consumer proposal, which for many people is the best solution.

Since this is a complicated area of bankruptcy law, please contact our bankruptcy trustee offices to schedule a free initial consultation. We will review your income, and explain how surplus income will be calculated in your situation, which will allow you to estimate the cost and length of your bankruptcy.

At Hoyes, Michalos and Associates we are proud to be a team of understanding professionals who are experts in bankruptcy, consumer proposals and all Ontario debt management options.

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