How Long Does It Take To Get Out of Bankruptcy in Ontario?


The prospect of declaring bankruptcy in Ontario is daunting for anybody. Somebody lacking experience or professional help will undoubtedly be stuck with a seemingly endless list of questions about what bankruptcy is and the steps they need to take. “How long does bankruptcy take?” 

If you haven’t declared bankruptcy yet, and are considering whether or not you should, we advise you to speak with a Licensed Insolvency Trustee before making your decision.

What is Bankruptcy?

what is bankruptcy

Bankruptcy is a legal process by which an individual may be discharged from their debts. One who declares bankruptcy, however, is subject to conditions. 

Regardless of whether the individual enters bankruptcy via voluntary assignment, involuntary assignment, or deemed bankruptcy, their assets are liquidated (with exceptions). Additionally, a series of meetings and counselling sessions with creditors are held to help them understand the circumstances of their bankruptcy and what to do moving forward.

Individuals in bankruptcy in Ontario and Canada are required to make “surplus income” payments. The surplus payment is calculated by determining the part of earnings that surpasses what is needed to maintain a reasonable standard of living. Anything past that threshold is required to be paid to creditors. 

What it Means to Be Discharged From Bankruptcy

People experiencing bankruptcy in Ontario might have questions about their condition, such as “what does discharged from bankruptcy mean?” or “how long does bankruptcy last in Ontario?”

“Discharged from bankruptcy” is the final step of the bankruptcy filing process. In short, it means you are free from your debts – you may begin rebuilding your credit. 

You’re allowed to start rebuilding your credit immediately after your discharge. Just like declaring bankruptcy, however, you are subject to conditions. Your bank may require you to apply for a secured credit card. Essentially, this means you put a deposit on your card, and only after making regular payments are you eligible for a normal credit card. 

Difference Between the First Time and the Second Time

discharged from bankruptcy

There is a difference between first-time and second-time bankruptcy. An individual will be held to a much different standard during their second bankruptcy than their first in regard to length, income, and more. 

People filing for bankruptcy for the first time can be discharged in as quick as nine months. This depends on whether or not they fulfill all the duties assigned to them during their bankruptcy and if no relevant authorities, like creditors, object to the bankruptcy discharge. If the individual has a surplus income they are required to repay and their bankruptcy status is maintained for twenty-one months.

Individuals filing for bankruptcy a second time are subject to harsher bankruptcy lengths. They are subject to bankruptcy for twenty-four months if they do not make surplus income and thirty-six months if they do make surplus income. 

Get Trusted Bankruptcy Help From Lazard and Associates

Filing for bankruptcy in Ontario? Have questions about how to get discharged from bankruptcy? 

Don’t jump into bankruptcy head-first – The experts at Lazard and Associates are here to make sure you know everything you need about bankruptcy to ensure your financial safety and freedom. 

Are you ready to start building your debt-free life? Contact us today to get started.