Debt Erased

Debt ErasedBankruptcy debt erased is applicable to bankruptcy or entering into a consumer proposal, when you can have most of your bankruptcy debt erased.  Almost all debt can be erased by a consumer proposal or going bankrupt except for the following debts that are not able to be erased in a bankruptcy or consumer proposal:

  1. Fines imposed by a Court;
  2. Money owing for things stolen;
  3. Things obtained by misrepresentation;
  4. Alimony or maintenance payments.
  5. Award of damages by a court for intentionally inflicting bodily harm or sexual assault.
  6. Student loans if bankruptcy is filed prior to or within seven years after the finish of studies.  In a hardship situation, the court can discharge the student loan debt, once five years has passed since the schooling, if the bankrupt has acted in good faith and will continue to experience financial problems such that the bankrupt will be unable to pay the debt.

We are often asked if EI debt can be erased in a bankruptcy.   The answer is “No”, because this debt is assumed to have been acquired through misrepresentation.

People are pleasantly surprised to find that income tax debt, including debt owed for GST and Payroll deductions are erased in a personal bankruptcy.

 


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