The Role of a Debtor in Bankruptcy – Get Help from a Trustee
Another important term to understand is “debtor.” This is someone who is in debt and is seeking help from a trustee. The debtor owes the money and is the person who declares bankruptcy or files a Consumer Proposal.
For more information and resources for debtors, you can visit the OSB website but it may be easier to explore all of your options with us first. Bankruptcy is usually considered a last resort.
A trustee in bankruptcy is an officer of the Court. While they are responsible for ensuring that a debtor’s rights are not abused, they must uphold the rights of the creditors.
The Role of a Creditor in the Bankruptcy Process – Insolvent Debtor
A creditor is someone who lends someone money. In an insolvency (bankruptcy) situation, the creditors are those companies who have lent the debtor money. For example, creditors can be banks, credit unions, credit card companies, payday loan companies, or even private lenders.
Upholding the rights of the creditors means that a trustee in bankruptcy must:
- Assess a debtor’s actions and affairs before and during a bankruptcy
- Sell a debtor’s assets, hold the money in trust and pay it to the creditors at the right time
- Make sure a creditor’s claims are valid
- Process all relevant paperwork
- Administer the bankruptcy or proposal process, also called the estate, from beginning to end
How Discharge Works – Bankruptcy, Court | Refusal, Conditional and Suspended
If you decide to file for bankruptcy it is important that you are honest about your situation before and during the bankruptcy process.
Ultimately, as an officer of the Court who specifically works on bankruptcy cases, a trustee must be able to state to the Court that their client, the debtor, has met the conditions to be discharged from their bankruptcy. If they are not able to state that, a trustee has the option to request a conditional discharge, a suspended discharge or even that the discharge is refused. One reason a discharge may be refused is if the debtor has been dishonest, either before they claimed bankruptcy, or during the process to obtain their discharge.
Follow Your Trustee’s Process to be Discharged and Avoid Legal or Financial Uncertainties and Additional Costs
A common reason for a delay in bankruptcy discharge is to give you extra time to pay your creditors.
A common reason for a trustee to ask that a debtor’s discharge be delayed is so that the debtor has extra time to pay more money to their creditors. If this happens, your trustee will explain the process to you. Once you have declared bankruptcy you need to follow through with the trustee’s procedures in order to be discharged. Otherwise, you may be left in an uncertain legal position. Your financial affairs will be put on hold until your situation is sorted out. This can become a lengthy and costly process.
Filing for Bankruptcy is a Lengthy Legal Process
Filing or claiming bankruptcy isn’t a one-day event. It is the start of a legal process to eliminate debt. The bankruptcy process will take at least 9 months to complete.
At the end of the process, the goal is for someone to be discharged from the process of going bankrupt. After all the requirements have been met, someone is released from their obligations. This is what “discharged from bankruptcy” means.
Common Questions About a Bankruptcy Trustee