How long does the bankruptcy process take in Canada?

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Understanding the bankruptcy process in Canada doesn’t have to be stressful. If your income is below a certain threshold, expect the process to take around 9 months. But if you earn more, surplus income payments could extend it to 21 months. Stay committed to your duties and get ready for a fresh start!

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Question

How long does the bankruptcy process take in Canada? I want to know the typical timeline for the bankruptcy process in Canada, from start to finish.

From: Anonymous Question, Vancouver, British Columbia (BC)

Debt Insiders Answer

Navigating bankruptcy in Canada doesn’t have to be confusing. Generally, the process wraps up in about 9 months if your income is under the government’s set benchmark. But if you’re bringing in more, like over a certain threshold, be prepared for surplus income payments that can stretch the timeline to 21 months. Throughout this journey, you’ll have some essential duties, like attending counselling sessions and regularly updating your Licensed Insolvency Trustee with your income and expense reports. Rest assured, meeting these obligations smooths the path towards a fresh financial start!

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

In Canada, the typical bankruptcy process usually takes about 9 months to 21 months from start to finish. This timeline can vary depending on several factors, such as the complexity of the case and the debtor’s conduct. Specifically, the duration is outlined under the Bankruptcy and Insolvency Act (RSC 1985, c 11) and related regulations.

• The first stage involves the filing of a bankruptcy application, and during this initial phase, the trustee will perform their duties promptly, generally taking about 30 days for the initial estate administration (refer to the Act, Section 49).
• After that, the trustee may take several months to resolve any issues raised by creditors, which can extend the timeline significantly if disputes arise (see the Act, Section 48).
• For straightforward cases without complications, the discharge process often occurs about 9 months after filing, while more complex cases can take up to 21 months or longer (refer to the Act, Section 68).

Ultimately, the specific duration will depend on the individual circumstances of each bankruptcy case.

From: OSB Helper

Related Questions

Here are the top 5 most frequently asked questions related to the duration of the bankruptcy process in Canada, along with brief answers:

1. How long does the bankruptcy process take for a first-time bankrupt?

• The bankruptcy process typically takes 9 months if no surplus income payments are required, or 21 months if such payments are necessary[2][3][5].

2. How long does the bankruptcy process take for a second-time bankrupt?

• The process can take up to 24 months for an automatic discharge without surplus income payments, or up to 36 months if surplus income payments are required[1][2][3].

3. What are the conditions for an automatic discharge from bankruptcy?

• An automatic discharge is granted after 9 months if it is a first bankruptcy, there are no objections, no surplus income payments are required, and other specific conditions are met[2][3][5].

4. How does surplus income affect the bankruptcy discharge timeline?

• If surplus income payments are required, the discharge timeline can extend to 21 months for first-time bankrupts or up to 36 months for second-time bankrupts[2][3][5].

5. What steps must be taken during the bankruptcy process to ensure a timely discharge?

• During the process, one must attend financial counselling sessions, file monthly income and expense reports, provide tax return information, and make any required payments to the trustee[2][3][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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