Bankruptcy and Insolvency laws are designed to basically allow a person who is loaded with debts to start life again without stress from creditors, collection agents or legal proceedings due to unpaid debts.
A person who files personal bankruptcy or consumer proposal must demonstrate that he/she has low income and no sufficient assets to pay his/her debts.
To protect creditors, a Bankruptcy Trustee or a Consumer Proposal Administrator would examine closely the bankruptcy/consumer proposal application to insure that an applicant truthfully discloses his/her true income and assets. When a trustee or an administrator is satisfied as to the truthfulness of the information provided in the application, it would be filed to the proper government agency.
For a bankruptcy, the processing period is from nine-months to twenty-one months for a first-time bankrupt, depending on the income of the bankrupt person, while on a consumer proposal it would be up to a maximum of sixty months depending on the amount of debt of the person who files a consumer proposal.
During the processing period, creditors have the right to object to the discharge from bankruptcy of the bankrupt person or to the issuance of the Certificate of Completion of Payment in a consumer proposal, should they (creditors) could find out that the applicant misrepresented his/her income or asset or both which the trustee/administrator did not able to discover.
A good example: an applicant for bankruptcy did not declare one of his cars worth $10,000. As a consequence, a creditor objected to his discharge and now it is the bankruptcy court for the judge to resolve the issue. This would take months if not a year or so for a judge to render judgment. Thus, the discharge from bankruptcy is unnecessarily delayed. Not only that, the judge may require the bankrupt person to pay the creditor who objected, the amount representing the value of the car, and until the amount is paid in full the bankrupt person would get only a partial discharge.
To avoid unnecessary delay of your discharge or the issuance of Certificate of Completion of Payment, honestly disclose all your assets and income.