Will bankruptcy clear all debts?

When you receive a discharge after completing your bankruptcy, it releases you from the debts you owed before your date of bankruptcy. When you successfully complete your consumer proposal, your certificate of full performance releases you from the debts you owed before your consumer proposal was filed.

There are certain types of debts that do survive your bankruptcy; referred to as non-dischargeable debts:

  • Debts or liabilities resulting from obtaining property or services by false pretences or fraudulent misrepresentation. Note that this may include Employment Insurance overpayments.

  • Student loans are only discharged if you have not been a full or part-time student at any time in the seven years prior to filing for bankruptcy. Be sure to contact the National Student Loan Service Center for your End of Study Date, prior to filing personal bankruptcy or consumer proposal.

  • Fines, penalties and restitution orders imposed by Court.

  • Court awarded damages for intentionally inflicted bodily harm, sexual assault or wrongful death resulting therefrom.

  • Debts or liabilities arising out of fraud, embezzlement, misappropriation or defalcation.

  • Debts or liabilities for alimony, maintenance, spousal support or child support.

If you have any of these debts, it is important to discuss any debts that you think might fall in these exceptions with your Trustee before filing your personal bankruptcy or consumer proposal.

Personal bankruptcy and consumer proposal do not release you from paying secured debts for assets you chose to keep. If you chose to keep your home and vehicle, you will be required to keep making the payments on these debts, which are secured by those assets.

When you receive your certificate of discharge, we strongly recommend that you keep this document in case a creditor or collection agency attempts to collect a debt that has been discharged in your bankruptcy. This document is necessary if you need to have errors on your credit report corrected.