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What is not Discharged?
The principal focus of either a consumer proposal or a bankruptcy is to give the debtor a fresh start without the burden of the previous debts. Yet there are certain claims which the government has declared to be so special that there remains the obligation of a debtor even after filing a bankruptcy or proposal. In essence, they are:
arrears of alimony or family support
student loans, where the student last attended class seven years prior. This may be reduced by the Court to five years.
penalties or fines imposed by Court (including traffic violations)
debts incurred through fraud
These debts may participate in the distribution of an Estate but remain the obligation of the debtor.
In addition, there are cases where the taxation department can take a lien (hypotheque legale) on a debtor’s assets prior to bankruptcy, even without your knowledge or consent. In such a case, their security interest remains on the asset even if you file a proposal or bankruptcy. This lien can only be taken prior to your filing, otherwise the government is an ordinary unsecured creditor and their debt is discharged as all other creditors.
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Actual client testimonial. Name removed to protect privacy