What debt is not covered by bankruptcy Canada?

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In Canada, some debts can’t be wiped away by bankruptcy. Non-dischargeable debts like court fines, penalties, fraud-related debts, spousal and child support, and recent student loans can linger. Even gambling debts and parking tickets can stick around, though courts may offer some flexibility.

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Question

What debt is not covered by bankruptcy Canada? I’d like to know what debts don’t get discharged in a bankruptcy in Canada. Are there any exceptions?

From: Anonymous Question, Hamilton, Ontario (ON)
Topic: Personal Bankruptcy

Debt Insiders Answer

In Canada, some debts simply won’t vanish through bankruptcy. Think of fines, penalties, and those restitution orders from a court—those stick around. If any debt comes from fraudulent activities, that stays too, along with spousal and child support payments. Student loans are a bit tricky and hang on unless you’ve been out of school for over seven years. Gambling debts also might cling on, as do things like court fines or parking tickets. Yet, there’s a bit of wiggle room since courts hold the discretion to include some conditional terms on discharge orders.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

In Canada, the debts that are not discharged in bankruptcy include:

1. Child and spousal support payments – These obligations remain in effect regardless of bankruptcy (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 178(1)(a)).
2. Fines and penalties imposed by a court – Any fines or penalties ordered by law remain payable (Bankruptcy and Insolvency Act, Section 178(1)(b)).
3. Debts resulting from fraud or misrepresentation – Debts incurred through fraudulent means are not discharged (Bankruptcy and Insolvency Act, Section 178(1)(c)).
4. Student loans – These remain undischarged unless they are more than 7 years old (Bankruptcy and Insolvency Act, Section 178(1)(g)).
5. Debts not provable in bankruptcy – Such as some secured debts and certain taxes (Bankruptcy and Insolvency Act, Section 178(1)(d)).

For more specific regulations on what constitutes provable debt, refer to the Bankruptcy and Insolvency Act and its accompanying regulations.

From: OSB Helper

Related Questions

Here are the top 5 most frequently asked questions related to the debts not covered by bankruptcy in Canada, presented in a clear and numbered format:

1. Are student loans covered by bankruptcy?

• No, student loans are not covered unless it has been more than seven years since the borrower ceased to be a student[2][5].

2. Are secured loans covered by bankruptcy?

• No, secured loans such as mortgages and car loans are not covered by bankruptcy[1][4].

3. Are child support payments covered by bankruptcy?

• No, child support payments are not covered by bankruptcy[1][4].

4. Are spousal support payments covered by bankruptcy?

• No, spousal support payments are not covered by bankruptcy[1][4].

5. Are court fines and penalties covered by bankruptcy?

• No, court fines and penalties are not covered by bankruptcy[1][4].

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

References

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