Question: Last year i had a Consumer Proposal Annulled, because i lost my job and couldn’t keep up the payments. I wish to file for bankruptcy, and i am wondering if an automatic discharge would be opposed or be difficult because i already had a proposal annulled on record. Also since this would be my first bankruptcy, could i still be discharged after 9 months, or would i have to wait 21 months if this new law comes in effect ( i heard march 2009)?
Answer: Since you have not been previously bankrupt, you would be eligible for an automatic discharge from bankruptcy after nine months. However, if you have significant income, or if there are any other issues, it is possible that your bankruptcy period could be extended. If that extension leads to a bankruptcy court discharge hearing, the result will depend on where in Ontario you live. The Toronto bankruptcy court may consider your failed proposal as a “prior insolvency event”, which may lead to more onerous discharge conditions. Bankruptcy courts outside of Toronto generally do not impose those restrictions.
It is therefore critical that you ensure that your bankruptcy is completed without the need to attend in court. Your Ontario bankruptcy trustee can provide you with more detailed information.