Resolving Discharge Issues

March 5, 2018

• Insolvency News

A surprising number of people file for bankruptcy then do not get discharged, this blog is a guide to resolving discharge issues that should help regardless of who your trustee was.

Common problems:

1. Did not pay the trustee fees
2. Missed attending at the two required counselling sessions
3. Did not provide trustee with the information for completion of tax returns
4. Failed or neglected to make settlement with trustee for the value of non-exempt assets
5. Non-attendance at court hearing
6. Surplus income was not paid or disagreement with trustee’s calculations unresolved
7. Trustee is no longer practicing.

Resolutions:

Be mindful that all trustees would rather complete the administration than close files as incomplete.  Some trustees will charge a “nuisance fee” for reopening closed files – there is no statutory basis for their doing so and such a charge may be reviewed by the court, if it is unreasonable.

The numbers listed below under the “Solutions” heading correspond with the numbers above in the common problems list.

Solutions:

1. Find out from your trustee how much money is owing and arrange to make payment or payments. Most trustees will want a single lumps sum payment of they have already closed your file.
2. Arrange with your trustee to complete the requisite counselling either through the trustee’s office or by attending at another qualified BIA counsellor’s office.
3. Simply provide the information to the trustee or complete and file the returns through an accountancy office. The tax preparer will require your estate number and date of bankruptcy as well as the name of your trustee.
4. Ensure that you or your trustee have properly assessed the value of the asset(s) in question then either pay the value or arrange for payments until the requisite amount has been paid. Once again, the trustee may not permit payments if they have already closed the file.
5. If your file has been to court your attendance is, in most cases, required. If you did not attend ask your trustee if another hearing can be arranged.
6. Review the trustee’s calculations if you disagree with the fairness of them – there are two opportunities to request mediation but if your case has already been to court then you will need to make you arguments through the court.
7. If your trustee is retired or no longer practicing you should approach another trustee office for assistance.

Going to Court shouldn’t be intimidating:

Be prepared to answer questions with logical and truthful explanations, if you haven’t done something simply say so making up excuses is not helpful.  Be prepared to provide reasonable solutions to outstanding matters for example, “it will take me three months to make the necessary payments at $X.YZ per month”.

Bankruptcy court is rarely a forum to resolve issues of “blame” – stay focused on dealing with the issue(s) at hand and facilitating solutions – remain calm and keep problem focused.