Relief Option for Undischarged Bankrupts
The Bankruptcy and Insolvency Act (BIA - Federal Government Legislation) allows an undischarged bankrupt to be able to file a proposal as a way of dealing with his or her debts. This option is used by individuals who filed an assignment in bankruptcy and then found that their situation had changed for the positive. This allows them to make a proposal (make monthly payments) to their creditors, which when accepted by the creditors, cancels out the bankruptcy (as if it never happened).
Well, this option is also available to an undischarged bankrupt or if the trustee has received his or her discharge from the bankruptcy administration. In these cases, if the bankrupt wishes to complete the bankruptcy, they’re required to go to their original trustee and have them reappointed to administrate the estate by the courts. In many cases, there are significant fees involved in this process, which is just the starting point.
This is why many undischarged bankrupts wishing to finalize their insolvency obligations as a way of dealing with difficult credit references (credit score, credit report, etc.) will seek out a trustee to determine if their proposal to the creditors is viable. Once the proposal is deemed or actually approved by the courts, that initial bankruptcy is annulled, and on completion of the proposal terms and proposal duties, the debtor would receive a certificate of completion.
One thing to keep in mind is that the undischarged bankrupt must be in a position to file a viable proposal. If the proposal is annulled due to the lack of meeting the proposal obligations (falling behind in the monthly payments), the debtor goes back into bankruptcy and then needs to complete the duties associated with that deemed bankruptcy assignment.
Give Us a Call in Alberta, the Northwest Territories or Nunavut
To learn more about this option or to see if filing a proposal to your creditors is a way to handle the completion of your initial bankruptcy, give Moses Advisory Group Inc. a call. We would be more than happy to provide you with more detailed information to assist you in making an informed decision, and if feasible, assist you with the presentation of a proposal to your original bankruptcy creditors. Based in Edmonton, we serve clients throughout Alberta, the Northwest Territories and Nunavut.