When a Bankruptcy Ends Discharge from Bankruptcy

The bankruptcy administration ends when you are discharged from bankruptcy.

In most cases, discharge means that your creditors will no longer be able to pursue you for your pre-bankruptcy unsecured debts. Any debts you accrued after bankruptcy will still need to be paid. Also, any secured debts such as a mortgage or a loan you obtained for the purchase of a car will continue to be due.

Many people will receive an automatic discharge – if there are no problems with the bankruptcy administration and no party objects to your discharge from bankruptcy. In cases where there is an objection, the Trustee typically assists a debtor to apply to court for the discharge order. In some cases, the person who is bankrupt may have to apply to court for a discharge without the assistance of a trustee.

The intention of discharge is to give honest but unfortunate debtors the ability to start again and reintegrate into financial society without the burden of the pre-bankruptcy debts. Creditors will receive less than they bargained for. If there is an opposition to your discharge, a court may decide that you should not be discharged or that you will be required to meet conditions (such as a payment, a suspension or both) before you can be discharged from bankruptcy.

A conditional discharge is an order of the court that requires conditions to be met before a person who is bankrupt is discharged. A condition of discharge may take the form of a payment, a suspension or both.

Debts that are not affected by the bankruptcy discharge include:

• any debts that are acquired after the bankruptcy assignment
• secured debts, such as home mortgages or vehicle loans
• examples included in question "What debts are not discharged in the bankruptcy process?"

A court hearing will likely be required to determine how best to address the discharge if:

• a creditor, a bankruptcy trustee, or the Superintendent of Bankruptcy objects to the bankruptcy discharge
• some of your debts are not automatically dischargeable. For example, if you own substantial personal income tax debt or student loan debt.

Objections usually occur when the trustee, a creditor or the Superintendent of Bankruptcy suspects that you are using the bankruptcy system to escape debt for reasons that are not honest or appropriate.