What happens to your debts when you go bankrupt in Ontario will depend on the type of debt.
Most unsecured debts are discharged at the end of your bankruptcy. Unsecured debts that are discharged include credit cards, bank loans, lines of credit, pay day loans, and taxes. Secured debts, such as car loans and mortgages on a house, are not discharged unless you surrender the asset (the house or car) at the start of the bankruptcy.
Debts that are not discharged when you go bankrupt in Ontario include:
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Student loans less than 10 years old (click here for the current rules on student loans, as the rules will be changing in 2009);
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Alimony and child support;
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Fines and most court ordered restitution payments;
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Debts that arose as a result of fraud;
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Certain government overpayments (this is a complicated area, so if you have received overpayments from the government for unemployment insurance or child tax credits, you should discuss this with your Ontario bankruptcy trustee).
It should be noted that determining whether or not a debt is discharged in a bankruptcy can be complicated, and the rules can change as a result of court rulings, so it is essential that you review all of your debts with a licensed trustee prior to filing for personal bankruptcy in Ontario.
Please consult an Ontario bankruptcy trustee for more information on what happens to your debts when you
go bankrupt in Ontario.