By Natalia Ros
Banks won’t issue you credit cards, lending companies will not approve your mortgage, a car dealership won’t sell you a car, and you will not be able to get a finance plan for that lovely patio set that you have always wanted but just cannot afford – all because you have filed for bankruptcy. Your friends and family ask you to go on vacation, your son asks you to buy a super gadget that is only sold online, your daughter wants you to become a guarantor on her first credit card, and you keep coming up with creative excuses – you don’t want them to know the truth.
The truth is that filing for bankruptcy has never been fun. People are ashamed of it, they feel that their social status has diminished, that they are not worthy of the prior treatment, that they have been stigmatized.
Yet there is another truth too – that sometimes filing for bankruptcy is simply a necessary step to protect you from creditors. And the good news is that its not forever. Bankruptcy files do get discharged, and in years passed, no one will look back at this unfortunate period in your history.
There are some things that you should know about bankruptcy discharges and what may potentially stand in your way to get that longed-for discharge registered successfully.
When applying for a bankruptcy discharge, your discharge may be disputed by any creditor that was affected by your bankruptcy claim. Creditors can do this by filing a formal Objection to Discharge which is a formal law suit in a provincial court against you and can be filed against a particular debt within your bankruptcy case or against all of your debts. In order to do so and to win its case, the Creditor filing the formal Objection will need to be able to prove that your acts were inappropriate when you were taking the loan or opening your bankruptcy case. Situations where people counterfeit documents in order to obtain large loans, or stage large debts by taking the money and claiming the debt unpayable, or transfer their real property to their family members before applying for bankruptcy in order to have their home excluded from the list of assets would likely satisfy this Objection.
Now the good news is that this happens rarely due to certain complications associated with this procedure that would not likely be favored by the creditor. Arguing such an objection would require a formal law suit procedure to be started by the creditor through its lawyer and therefore would impose additional legal expenses on the creditor. Creditor that were affected by a bankruptcy claim have been financially hurt already, and paying for a lawyer in order to argue their case would add to that expense – not a likely scenario any wise creditor would pursue.
However, that said, there are odd cases where creditor would genuinely believe that they have fair grounds for arguing their case against your debts. In this case, there can be only two outcomes:
- If the creditor loses, your bankruptcy case will get discharged and you will be freed from your debt payments.
- If the creditor wins, your bankruptcy case will not be discharged and you will be required to fully repay your debt to this debtor.
As a good practice, you should be checking your bankruptcy status often to ensure that you are fully aware of the most current status of your file.
Call us to inquire about the status of your bankruptcy file.
Toll free number: 1.800.668.8208
Office telephone number: 416.595.7177
ESC Corporate Services Ltd.