Getting a discharge means the release of an individual from their legal obligations
What does trustee discharge mean?
This discharge is granted by the Office of the Superintendent of Bankruptcy (OSB) after the individual has fulfilled the terms and conditions of their consumer proposal or bankruptcy.
The Role of a Licensed Insolvency Trustee
The LIT is responsible for managing the individual’s assets and debts during the proposal or bankruptcy process.
As part of this process, the individual must make regular payments to the LIT, who then distributes the funds to the individual’s creditors.
Eligibility & Limitations of a Trustee Discharge
Once the individual has fulfilled the terms of their consumer proposal or bankruptcy, the LIT will apply for a trustee discharge on their behalf.
If the application is approved by the OSB, the individual will be released from their legal obligation to repay their remaining debts.
This means that creditors can no longer take legal action against the individual to recover the debts included in the consumer proposal or bankruptcy.
It is important to note that not all debts are dischargeable through a consumer proposal or bankruptcy.
Some examples of debts that cannot be discharged include:
- Non-dischargeable debts
- Child and spousal support payments.
- Most fines and penalties imposed by government agencies.
- Most student loans, if the individual has not been out of school for at least seven years.
Secured Debts Additionally, even with a discharge, the individual will continue to be responsible for any secured debts (such as a mortgage or car loan) and any assets that are securing the debt will be at risk of being repossessed or foreclosed upon if payments are not made.
Eligibility for a Discharge
Conclusion In conclusion, a trustee discharge in Ontario, Canada is the release of an individual from their legal obligation to repay their debts under a consumer proposal or bankruptcy filing, granted by the OSB.
In order to be eligible for a discharge, an individual must fulfil the terms and conditions of their consumer proposal or bankruptcy and work with a LIT.
However, it is important to note that not all debts can be discharged, and the individual will continue to be responsible for any secured debts.