What are the types of discharge from bankruptcy?

What are the types of discharge from bankruptcy?

What are the types of discharge from bankruptcy?

Automatic Discharge:  Where a first or second-time bankrupt has fulfilled all of his or her required duties, and where the Trustee is satisfied that an automatic discharge is appropriate, a certificate of discharge is issued by the Trustee directly.  If the Trustee has sufficient concern to oppose the discharge, an automatic discharge is no longer available, and the discharge becomes a matter for the court.

Absolute Discharge:  An absolute discharge is issued by the court. The debtor is discharged from all debts incurred prior to the date of bankruptcy, except those which by law survive bankruptcy.

Conditional Discharge:  The bankrupt’s discharge may be granted conditionally when there are outstanding matters in the administration, such as fees, asset realization, or providing documents or tax information.  A conditional order sets the requirements, and when they have been met, the Trustee sends a report to the court recommending that discharge now be granted.

Suspended Discharge:

This type of order is made when the current bankruptcy is not the first insolvency event (bankruptcy or proposal), or there has been serious misconduct by the bankrupt either before or during the bankruptcy.  A suspended discharge means that the discharge will take place sometime in the future based on a date set by the court.

Refusal of Discharge: The court may refuse a discharge when it considers that the debtor does not deserve a discharge.  An order of this type is extremely rare, and is usually a result of clear and severe misconduct or criminal activity by the bankrupt. A person who has filed repeated bankruptcies may also have a discharge refused, especially if the causes of bankruptcy are similar each time.  If discharge is refused, a person remains in bankruptcy indefinitely, but is entitled to go to court after one year to apply for the refusal to be reconsidered.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.  

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