What happens if I miss a payment in bankruptcy?

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Miss a payment during bankruptcy and it can shake things up. Your trustee might give you a friendly nudge, but if it’s unresolved, they could ask the court to cancel your bankruptcy protection. This lets creditors pursue debts again. So, keep up with payments to enjoy the benefits of debt clearance!

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Question

What happens if I can’t make my bankruptcy payment? I’m worried about missing a bankruptcy payment and want to know the consequences.

From: Anonymous Question, Ontario (ON)

Answer

Missing a payment during your bankruptcy can really shake things up. First off, the bankruptcy trustee will likely send you a friendly nudge to remind you about the missed payment. If you can’t get things sorted, the situation could escalate with the trustee possibly requesting the court to cancel your bankruptcy protection. This would open the door for creditors to chase the debts again. Plus, missing out on payments might mean losing out on those sweet benefits of the bankruptcy process, like having your debts cleared once you’ve made all the required payments.

From: Insider Scott

OSB Based Answer

If you cannot make your bankruptcy payment, the consequences can vary depending on your specific circumstances. Generally, if you miss a payment, your bankruptcy trustee may initiate proceedings for termination of your bankruptcy, as outlined in the Bankruptcy and Insolvency Act (RSC 1985, c 11, s 68). Additionally, consequences may include the possibility of losing the discharge from bankruptcy, as failure to maintain the required payments can impact your ability to be discharged from debts.

Your trustee is obligated to report any missed payments to the Office of the Superintendent of Bankruptcy, which may lead to further repercussions. It’s advisable to communicate with your bankruptcy trustee immediately if you foresee missing a payment to discuss potential options or solutions.

From: This answer is provided by scanning the OSB Bankruptcy & Insolvency Act and related directives

References

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