A first bankruptcy in Ontario usually lasts 9 months. If you have surplus income, it lasts 21 months. A second bankruptcy lasts 24 or 36 months. These timelines come from section 168.1 of the federal Bankruptcy and Insolvency Act (BIA), so they’re the same in Ontario as anywhere else in Canada.
The clock starts on the day you file and stops at your discharge—the point when you’re legally released from most of your debts. In this guide, you’ll learn how to work out your discharge date and what could delay it. We also explain how long bankruptcy stays on your credit report, and when a consumer proposal could clear it sooner.
| Your situation | No surplus income | With surplus income |
|---|---|---|
| First bankruptcy | 9 months | 21 months |
| Second bankruptcy | 24 months | 36 months |
| Third or later bankruptcy | Court hearing required | Court hearing required |
Ontario in numbers: According to the Office of the Superintendent of Bankruptcy (OSB), 11,696 Ontario consumers filed for bankruptcy in the 12 months ending August 31, 2026—up 22.7% from the previous 12 months. Consumer proposals were far more common, making up nearly 8 in 10 Ontario consumer insolvency filings over the same period.
In this guide:
- How the 9-month discharge works
- Why surplus income means 21 months
- What can delay your discharge
- How long a second bankruptcy lasts
- Bankruptcy vs. consumer proposal timelines
- How long bankruptcy stays on your credit report
- Frequently asked questions
How does the 9-month bankruptcy discharge work?
You’re discharged automatically 9 months after you file if it’s your first bankruptcy and you don’t have surplus income. As long as nobody opposes your discharge, you don’t need to go to court.
To qualify, you’ll need to complete your duties as a bankrupt, including:
- Attending two financial counselling sessions with a registered counsellor
- Sending monthly income and expense reports to your trustee
- Disclosing all your assets and handing over any that aren’t exempt
- Attending any meetings your trustee or the OSB arranges
Your trustee sends a notice to you, your creditors and the OSB at least 15 days before your discharge date. Once you’re discharged, the trustee issues your certificate of discharge.
Example: You file a first bankruptcy on March 1, with no surplus income and no opposition. You’d be automatically discharged on December 1.
Thinking about filing? See how our Licensed Insolvency Trustees can help with bankruptcy in Ontario.
Why does bankruptcy last 21 months with surplus income?
Surplus income extends a first bankruptcy to 21 months so your creditors receive a share of your extra income for longer.
The OSB sets a monthly income standard based on your household size. If your income is $200 or more a month above that standard, you’ll normally pay half of the extra to your trustee, who passes it on to your creditors.
Those payments extend a first bankruptcy from 9 to 21 months. In the example above, a March 1 filing with surplus income would lead to an automatic discharge on December 1 of the following year.
Surplus income isn’t fixed. If your income falls during bankruptcy, your payments may drop or stop. If it rises, they may increase—so tell your trustee about any change right away.
If surplus income would push your costs higher than you can manage, a consumer proposal may cost less. We compare the two below.
What can delay your bankruptcy discharge in Ontario?
An opposition, missed counselling, surplus income or a large personal tax debt can all delay your discharge. Surplus income keeps your discharge automatic but moves it to 21 months.
The other three remove the automatic discharge, so a court decides when you’re released.
Someone opposes your bankruptcy discharge
Your trustee, a creditor or the OSB can oppose your discharge before the automatic date. Common reasons include unpaid surplus income, hidden assets, or running up debt just before filing. A court then hears the case.
You miss a bankruptcy counselling session
Both counselling sessions are mandatory. If you refuse or neglect to attend them, the BIA says you’re not entitled to an automatic discharge.
You have surplus income during bankruptcy
Having surplus income to pay turns a 9-month bankruptcy into a 21-month one, though your discharge stays automatic. Falling behind on those payments is a common reason for an opposition.
You owe $200,000 or more in personal income tax
If you owe $200,000 or more in personal income tax, and that tax makes up 75% or more of your unsecured debts, you can’t receive an automatic discharge. You’ll need a court hearing instead.
How a court can rule on your bankruptcy discharge
If your discharge goes to court, the judge can grant:
- An absolute discharge: You’re released right away
- A conditional discharge: You must meet conditions first, such as extra payments
- A suspended discharge: You’re released on a later date
- A refusal: You’re not discharged
How long does a second bankruptcy last in Ontario?
A second bankruptcy lasts 24 months, or 36 months if you have surplus income. Your discharge is still automatic, as long as you complete your duties, including counselling, and nobody opposes your discharge.
A third or later bankruptcy has no automatic discharge at all. Your trustee applies to court, and a judge decides when you’re discharged.
If you’ve been bankrupt before, ask a trustee whether a consumer proposal would suit you better. It’s a separate process under the BIA, so it doesn’t count as another bankruptcy and won’t add the 14-year credit record that comes with a second one.
Bankruptcy vs. consumer proposal: How do the timelines compare?
A consumer proposal usually lasts longer than a first bankruptcy, but it can clear your credit report sooner. A proposal can run for up to 5 years, while most first bankruptcies end in 9 or 21 months.
| First bankruptcy | Consumer proposal | |
|---|---|---|
| How long it lasts | 9 or 21 months | Up to 5 years (60 months) |
| What you pay | Surplus income (if any), plus the value of any assets above Ontario’s exemption limits | A fixed amount agreed with your creditors |
| Your assets | Assets above Ontario’s exemption limits go to the trustee | You usually keep your assets |
| On your credit report (Ontario) | 6–7 years after discharge | 3 years after you finish paying, or 6 years after filing – whichever is sooner |
With a consumer proposal, you offer your creditors part of what you owe, paid in fixed monthly amounts. There’s no surplus income rule, so earning more won’t increase your payments. (To see what that could mean in practice, read how much a consumer proposal costs.)
A proposal does need commitment. If you fall three months behind, it’s automatically cancelled (annulled). For a fuller side-by-side, see our guide to consumer proposal vs. bankruptcy.
How long does bankruptcy stay on your credit report in Ontario?
A first bankruptcy stays on your credit report for 6 years after discharge with Equifax and 7 years with TransUnion in Ontario, according to the Financial Consumer Agency of Canada (FCAC).
If you’ve been bankrupt more than once, each bankruptcy stays on your report for 14 years.
Counted from the day you file, a 9-month first bankruptcy would stay on your TransUnion report for about 7 years and 9 months.
You can start rebuilding your credit soon after discharge, though. Many people begin by:
- Checking their Equifax and TransUnion reports for errors
- Using a secured credit card and paying it off in full each month
- Keeping balances low on any new credit, well below the limit
- Sticking to a budget built on what they learned in counselling
Ontario bankruptcy frequently asked questions
These are the questions we hear most often about bankruptcy discharge in Ontario.
Do you have to go to court to be discharged from bankruptcy in Ontario?
Most people in Ontario don’t need to go to court to be discharged from bankruptcy, because a first or second bankruptcy usually ends with an automatic discharge. A court hearing is required if a creditor or your trustee opposes your discharge, you miss your mandatory counselling sessions, you owe a large personal tax debt, or it’s your third or later bankruptcy.
What’s the earliest you can be discharged from bankruptcy in Ontario?
The earliest you can be discharged from a first bankruptcy in Ontario is usually 9 months after filing, or 21 months if your income is high enough to require extra payments. You can apply to court for an earlier discharge, but this ends your right to an automatic discharge and leaves the outcome to a judge.
What happens after you’re discharged from bankruptcy?
Once you’re discharged from bankruptcy, you’re legally released from most of the debts you owed when you filed, and your trustee issues a certificate of discharge. Some debts survive discharge, including child and spousal support, court fines, debts arising from fraud, and student loans if you stopped studying less than 7 years before filing.
Speak to a Licensed Insolvency Trustee about your bankruptcy
Book a free, confidential consultation with one of our Licensed Insolvency Trustees today. With more than 50 years in the business, we’ve helped thousands of people get back to financial freedom. Your discharge clock starts the day you file, so the sooner you speak to us, the sooner you could be free of most of your debts.
Book your free consultation or call 800-268-8093 now.
