Frequently Asked Questions about Consumer Proposals and Bankruptcy Solutions
We have outlined below the most popular questions we are asked by individuals considering their options to deal with an unmanageable debt burden. Our FAQs are categorized into questions related to Consumer Proposals as well as Personal Bankruptcy.
If you don’t find the answer to your specific question below, please call 1-800-661-3030 toll free to reach the office closest to you or click to arrange for a Free Consultation
What is bankruptcy?
Bankruptcy is a legal proceeding that is available to you in order to resolve your debts. One of the main purposes of bankruptcy legislation, and why people declare bankruptcy, is to provide you with the opportunity to free yourself from an unmanageable debt load and start fresh – “a new lease on life.”
In order to declare personal bankruptcy, you must be insolvent. To be insolvent means to:
- Owe at least $1,000;
- Not be able to meet your regular payments as they are due to be paid.
How do I declare bankruptcy?
There are two ways for you to become bankrupt. The more common way is for you to make an assignment into bankruptcy (i.e. voluntarily go into bankruptcy by approaching a Trustee to have the necessary papers prepared and signed). The other rarely used way is for creditors to ask the Court to make an Order that you are bankrupt. In both of these situations, a Trustee in Bankruptcy is required to administer the bankruptcy.
Contact Us to arrange for a free, confidential, evaluation of your financial options. We can help you assess whether declaring bankruptcy is the right option for you.
What are the alternatives to bankruptcy?
Choosing to file for personal bankruptcy usually occurs after one has reviewed the following options and found them lacking:
- Contact your creditors: Explain why you cannot make your payments and suggest an arrangement that could work for both of you. You may be surprised that many creditors are willing to cooperate.
- Debt Consolidation Loan: You can approach a bank or financial institution about combining or “consolidating” your debts into one loan. This creditor pays off all your debts and, in return, you make monthly payments to that creditor. Make sure that you shop around because interest rates vary. Avoid further credit purchases because this could increase your debt load and make the consolidation loan too difficult to handle.
- Informal Proposal: In some cases, we can work with you and your creditors to set up a payment plan that allows you to pay your creditors in an orderly way, thus helping to preserve your credit rating. This operates similar to a debt consolidation loan, except that you do not borrow the money to pay off your creditors.
- Private Debt Counsellors: There are a number of private debt counsellors who will make arrangements with your creditors for you to pay off the indebtedness in full. The counsellor will review your financial situation and arrange a payment program between you and your creditors. A fee may be charged by the counsellor in order to perform this service.
- Consumer Proposal: Under the Bankruptcy and Insolvency Act, a Trustee files a proposal, which is an arrangement between you and your creditors that allows you to pay off only a portion of your debts, extend the time you have to pay off the debt, or provide some combination of both. To be acceptable, you must offer your creditors more money than what they would expect to receive in a distribution under a bankruptcy.
If you have any further questions, please do not hesitate to Contact Us
Will my creditors stop harassing me?
Yes, they will! By law, all actions against you must cease once the bankruptcy documents are filed. This does not apply to Family Maintenance Enforcement or to secured creditors such as banks or finance companies that hold, for example, a lien on a car.
Who will know?
For most bankruptcies, only the creditors, Trustee, Office of the Superintendent of Bankruptcy and the debtor are aware of the proceedings. In a bankruptcy where there are minimal free and clear assets (less than $15,000), the creditors are notified by mail only and there is no advertisement in the “legals” section of the newspaper. In a bankruptcy where there are significant free and clear assets (over $15,000), the creditors are notified by mail and a notice is placed in the “legals” section of the newspaper that informs the public of the date of the meeting of creditors.
The filing of a bankruptcy is public information to which the general public has access, though there is a fee for each search of the database. Credit reporting agencies obtain this information and keep it on your credit record for six years after your discharge from bankruptcy. However, this does not mean that you cannot obtain credit during this time; any granting of credit is the decision of the creditor. During your bankruptcy counselling sessions we will provide you with the tools you need to reestablish your credit rating after bankruptcy.
What am I allowed to keep?
When you file for bankruptcy in British Columbia, the property you are allowed to keep is called “exempt property” and includes:
- RRSPs up to an unlimited value (except for contributions made in the 12 months prior to bankruptcy)
- Equity in a home in Greater Vancouver and Victoria up to a $12,000 value (in the rest of the province up to a $9,000 value)
- Household items up to a $4,000 value
- One vehicle up to a $5,000 value (the vehicle exemption drops to $2,000 if the person is behind on child support payments)
- Work tools up to a $10,000 value
- Essential clothing and medical aids is unlimited.
What is a Consumer Proposal?
A Consumer Proposal is a legal process which provides a debtor with an opportunity to modify his or her payments to creditors, by extending the time for payment or reducing the total amount to be paid, without ongoing interest.
What am I not allowed to keep?
In a bankruptcy, any non-exempt assets are the property of the Trustee for the benefit of your creditors. For the majority of people who file for personal bankruptcy, the exempt property thresholds are sufficient to allow for the retention of all of their assets.
Any assets that you may acquire during the bankruptcy, such as inheritances or lottery winnings are also the property of the Trustee for the benefit of your creditors.
Will my creditors stop harassing me?
Yes, they will! Once a Consumer Proposal is filed and being considered by creditors, all actions against a debtor cease to have effect. This will also apply to garnishees against wages.
What do I have to do during the process of bankruptcy?
We will review your duties in bankruptcy with you in detail. The following duties comprise the majority of your obligations as a bankrupt:
You must attend two financial counselling sessions held at Sands & Associates’ offices and scheduled at the date of bankruptcy
- You must keep the Trustee informed of your current address, and co-operate with the Trustee’s requests for assistance and information (e.g. income tax information)
- You must also provide the Trustee with monthly reports of your household income and living expenses, and inform the Trustee of any change(s) in your family situation. The Trustee will supply you with the monthly report forms when you file for bankruptcy
- You may also be required to attend a meeting of creditors, which is not held unless required by the Bankruptcy and Insolvency Act or requested by the Superintendent of Bankruptcy or by creditors with a total of at least 25% of the proven claims. These meetings are usually held at the office of the Trustee
What about tax debt with Canada Revenue Agency?
If you owe Canada Revenue Agency for income taxes, GST, or employee remittances, these debts can be included in a bankruptcy and can be discharged under certain conditions. Generally speaking, a discharge of the debt is granted if you have completed your duties under the Bankruptcy and Insolvency Act and you have complied with making the appropriate filings and installment payments under the Income Tax Act. If CRA has taken appropriate steps prior to the date of bankruptcy to realize on the indebtedness but has been unsuccessful, CRA may then register as a secured creditor against real property (real estate) or your personal property (furniture, vehicles, etc.). We can review with you in detail the rights and remedies of CRA in your particular situation.
If you are a first time bankrupt and you owe CRA more than $200,000 for personal income tax debt (including interest, penalties or fines) and this amount represents 75% or more of the proven unsecured claims in your bankruptcy, you will not be eligible for an automatic discharge. In this case, the Trustee will be required to make an application to court to seek the terms of your discharge from bankruptcy. You will be required to submit monthly statements of income and expenses for at least 9 months. If you are required to pay $100 or more of surplus income under the Superintendent’s Standards in the first 9 months, the Trustee will be unable to make an application to court for your discharge until 21 months have expired. If you should have no surplus income under the Superintendent’s Standards in the first 9 months, the Trustee will make an application to court for the terms of your discharge when the 9 months have expired. For further clarification, please refer to the following diagram:
If you have been bankrupt before and you owe CRA more than $200,000 for personal income tax debt (including interest, penalties or fines) and this amount represents 75% or more of the proven unsecured claims in your bankruptcy, you will not be eligible for an automatic discharge. In this case, the Trustee will be required to make an application to court to seek the terms of your discharge from bankruptcy. You will be required to submit monthly statements of income and expenses for at least 24 months. If you are required to pay $100 or more of surplus income under the Superintendent’s Standards in the first 24 months, the Trustee will be unable to make an application to court for your discharge until 36 months have expired. If you should have no surplus income under the Superintendent’s Standards in the first 24 months, the Trustee will make an application to court for the terms of your discharge when the 24 months have expired. For further clarification, please refer to the following diagram:
What about student loans?
If the date of bankruptcy is more than seven years after the end of your studies, the debt will be released upon your discharge from bankruptcy.
If the date of bankruptcy is less than seven years after the end of your studies, student loans survive your bankruptcy and arrangements will have to be made for repayment of the loan. However, if you have acted in good faith and continue to experience difficulty paying the student loan, a Court can order the discharge of a student loan. This is only applicable if more than five years have passed since the end of studies.
How much does bankruptcy cost?
Trustee fees, filing fees, and counselling fees are regulated by the government. The Trustee is usually paid out of the funds from the liquidation of your assets. If you have no assets available, the Trustee will require a retainer or require that you arrange monthly payments to pay the Trustee’s fees and disbursements. In the simplest cases, this amounts to about $1,420 plus counselling costs and GST (roughly $1,800 total). Sands & Associates offers payment plans that allow you to make payments over a period of time.
What are the benefits of a Consumer Proposal?
A Consumer Proposal may be a better option than bankruptcy for a number of different reasons, including:
- An individual can retain assets that may be available to creditors in a bankruptcy;
- An individual can continue to be a director of an incorporated company;
- An individual’s professional accreditation may not be at risk, whereas in a bankruptcy, there may be issues;
- The Consumer Proposal remains on the individual’s credit report for three years following completion of the terms, whereas bankruptcy is noted for a minimum of six years following a discharge, and;
- Creditors receive more from a Consumer Proposal than they do from a bankruptcy and, for that reason, are more inclined to accept the arrangement to settle the debt.
As a first time bankrupt, how do I get my discharge?
Normally, an automatic discharge will be issued after 9 months from the date of your bankruptcy in the following circumstances:
- You have completed two counselling sessions, scheduled at the date of bankruptcy and held at Sands & Associates offices;
- Your creditors, the Superintendent of Bankruptcy, and the Trustee are not opposing your discharge;
- You have not had surplus income based on the Superintendent’s Standards during your bankruptcy.
If your surplus income payments are an average of $100 or more based on the Superintendent’s Standards during the first 9 months of your bankruptcy, you are required to continue submitting monthly statements of income and expenses together with any payments for an additional 12 months. You will receive an automatic discharge after 21 months if you have submitted the monthly statements, paid all surplus income accumulated during the 21 months and complied with your duties as a bankrupt. For further clarification, please refer to the following diagram:
How do I get my discharge if I have been bankrupt before?
If you have been bankrupt once before, you must remain in bankruptcy for a minimum of 24 months. Normally, an automatic discharge will be issued after 24 months from the date of your bankruptcy in the following circumstances:
- You have completed two counselling sessions, scheduled at the date of bankruptcy and held at Sands & Associates offices;;
- Your creditors, the Superintendent of Bankruptcy, and the Trustee are not opposing your discharge;
- You have not had surplus income based on the Superintendent’s Standards during your bankruptcy.
If your surplus income payments are an average of $100 or more based on the Superintendent’s Standards during the first 24 months of your bankruptcy, you are required to continue submitting monthly statements of income and expenses together with any payments for an additional 12 months. You will receive an automatic discharge after 36 months if you have submitted the monthly statements, paid all surplus income accumulated during the 36 months and complied with your duties as a bankrupt. For further clarification, please refer to the following diagram:
If you have been bankrupt more than once before, your discharge will not be automatic and must be heard before a Registrar or a Judge after the 36th month of your bankruptcy.
What about RRSPs?
You are entitled to keep all funds that you hold in an RRSP except for amounts contributed in the 12 months prior to your date of bankruptcy.
How do I successfully complete my bankruptcy?
Normally, an automatic discharge will be issued after nine months from the date of your bankruptcy in the following circumstances:
- You have completed two counselling sessions;
- You are not required to make additional payments based on the Superintendent’s Standards.
- You have not been bankrupt before. If you have been bankrupt before, your discharge will not be automatic and must be heard before a Registrar or a Judge;
- Your creditors, the Superintendent of bankruptcy, and the Trustee are not opposing your discharge. Occasionally, creditors oppose a bankrupt’s discharge and the matter is heard before a Registrar or a Judge. A discharge is usually granted when you are only earning sufficient income to reasonably support yourself and your dependents. The Trustee has an obligation to oppose your discharge if you have not completed your duties as a bankrupt.
What are the major steps in a Consumer Proposal?
Contact a Trustee
The first step in the process is to contact one of our professionals for a free, confidential, no-obligation consultation. This number will reach the Sands & Associates office that is closest to you: 1-800-661-3030.
We will review your financial situation and assist you in preparing the Consumer Proposal. We will prepare the necessary documents to file the Consumer Proposal with the Office of the Superintendent of Bankruptcy.
The Trustee will notify all of the individual’s creditors and provide them with a copy of the Consumer Proposal and other relevant financial information. Once creditors receive notification that the proposal has been filed, they are prohibited from taking any further collection actions. They will also receive a Report of the Trustee, which comments on the individual’s ability to meet the terms of the Consumer Proposal and provides a comparison of realization to creditors in the Consumer Proposal versus a bankruptcy.
The creditors have up to 45 days to consider whether to accept or reject the Consumer Proposal. If creditors do not respond, the Consumer Proposal is deemed to be accepted. However, creditors have been taking a more active role in the Consumer Proposal process because the return to them is higher than a bankruptcy, and usually vote on the Consumer Proposal by letter.
To be accepted by creditors, there must be at least a 50% majority in dollar value voting to accept the Consumer Proposal. Acceptance of the Consumer Proposal by those creditors who vote will be binding on the debtor and the remaining creditors who did not vote.
The creditors may request a meeting be held, although this is not a common occurrence. Any creditor who votes against the Consumer Proposal is deemed to be requesting a meeting be held, but in order to actually have a meeting, that creditor’s claim must represent at least 25% in value of all proven claims filed at the end of the 45 day period.
When the Consumer Proposal is accepted by the creditors, it is deemed approved by the Court after 15 days have expired.
An individual who files a Consumer Proposal is required to attend two financial counselling sessions. These sessions will focus on helping the debtor understand the causes of his or her financial difficulties, as well as assisting the debtor in managing their future financial affairs.
On acceptance by the creditors and approval by the Court, the debtor will make the payments directly to the Trustee as set out in the Consumer Proposal document. If payments are required monthly, and a debtor misses any three payments, the Consumer Proposal is deemed to be in default. In the case where payments are not required on a monthly basis, the Consumer Proposal will be in default if more than three months go by without the debtor making the required payment.
Once all payments under the Consumer Proposal are made, the Trustee will issue a Certificate attesting to the completion of the Consumer Proposal.
Who can make a Consumer Proposal?
A Consumer Proposal can be made by a person who owes between $1,000 and $250,000, excluding mortgages on a personal residence. If the person’s debts are more than $250,000, a person may still file a Proposal, but some different rules will apply.
If an individual is currently in bankruptcy, and their financial circumstances have changed for the better, that person can file a Consumer Proposal. The bankruptcy will be annulled on acceptance of the Consumer Proposal by the creditors and approval by the Court.
A joint Consumer Proposal may be filed by two or more individuals, if the Consumer Proposal can be reasonably dealt with together because of the financial relationship of the debts involved (eg. married couples, common-law partners).
What debts are not affected or discharged from bankruptcy?
Certain kinds of debt are not released by a bankruptcy. They are:
- Fines imposed by a court;
- Money owing for things stolen;
- Property or services obtained through false pretences or fraudulent misrepresentation;
- Alimony or maintenance payments;
- Award of damages by a court for intentionally inflicting bodily harm or sexual assault;
- Student loans if bankruptcy is filed within seven years after the end of studies.
What do I do if I think that CRA might register a secured position against me?
A search of the Personal Property Security Registry (British Columbia) or Land Titles will reveal if CRA has filed a secured claim against you. If there is no entry stating that CRA has registered, you may want to consider filing for bankruptcy or filing a proposal to creditors under the Bankruptcy and Insolvency Act in order to resolve the matter.
CRA has advised that they will generally honour provincial exemptions under the B.C. Court Order Enforcement Act and they are diligent in registering secured interests against seriously delinquent accounts.
How does CRA claim an interest in my property?
If you, or your representative, do not lodge an appeal within 90 days after an income tax assessment, or if you, or your representative, are ultimately unsuccessful in an appeal, CRA may make an application to the Federal Court of Canada to have a judgment issued. CRA may then register a secured claim under your name in the Personal Property Security Registry (British Columbia). This secures all personal property such as furniture, vehicles, etc. to CRA. If real property is involved, CRA may also register a judgment at Land Titles against your interest in property. This then becomes a secured claim in the bankruptcy, and you will have to deal with CRA separately from the bankruptcy proceedings.
In a bankruptcy, secured creditors are outside of the Bankruptcy and Insolvency Act. Depending on provincial legislation, registered secured creditors such as CRA can realize on the assets they hold for security and, in some provinces, claim for any shortfall in the bankruptcy proceedings.
What happens to my assets?
Assets, such as equity in a car or home, jewellery, RRSPs, or savings plans, can be retained by the individual. An individual may, however, voluntarily surrender an asset, such as a RRSP, so that the proceeds can form part of the Consumer Proposal.
Can I keep making my payments on my car or mortgage?
If a creditor has a lien on any of your assets (car loan, or lien against furniture), the creditor is not usually bound by the Consumer Proposal. An individual may wish to surrender the asset to the creditor, or make arrangements to continue with the payments so that the asset can be retained.
If an individual has a mortgage on their residence, they can continue making the mortgage payments.
Can income tax and GST debt be included in a Consumer Proposal?
If a debtor owes Canada Revenue Agency (formerly Canada Customs & Revenue Agency and Revenue Canada) for outstanding personal income taxes or GST, these debts can be included in a Consumer Proposal. A Consumer Proposal is the only mechanism in Canada that can be used to settle CRA debts for less than the full amount owing.
Canada Revenue Agency (“CRA”) is amenable to receiving less than full payment through a Consumer Proposal, provided the debtor:
- has filed all of the prior income tax and GST returns,
- will file future income tax and GST returns on time and make payment of any outstanding balances at time of filing, and
- in the case of self-employed individuals, make arrangements for payment of installments of future taxes.
What about alimony and maintenance payments?
Alimony or maintenance payments are not affected by bankruptcy and must be kept up to date. Bankruptcy does not stop collection actions for these types of claims. Unpaid alimony and maintenance are eligible to receive dividends that are available from the bankruptcy estate, and will be paid as a preferred claim for amounts incurred in the year before bankruptcy that remain unpaid at the date of bankruptcy.
What is counselling?
In a bankruptcy, the Bankruptcy and Insolvency Act requires that you attend two counselling sessions in order to be eligible for a discharge from bankruptcy. These counselling sessions are usually one-on-one between you and your Trustee. In general, counselling sessions deal with budgeting, financial planning, the cause(s) of your bankruptcy, and any other issues that are relevant to your situation.
The first counselling session must be held between 10 and 60 days following the date of bankruptcy; the second counselling session must be held no later than 210 days following the date of bankruptcy. The cost for each individual counselling session is included in the fees you pay for your bankruptcy and there is no additional out-of-pocket cost.
What if I have surplus in income during my bankruptcy?
If you have not been bankrupt before and your surplus income payments are an average of $100 or more based on the Superintendent’s Standards during the first 9 months of your bankruptcy, you are required to continue submitting monthly statements of income and expenses together with any payments for an additional 12 months.
If you have been bankrupt before and your surplus income payments are an average of $100 or more based on the Superintendent’s Standards during the first 24 months of your bankruptcy, you are required to continue submitting monthly statements of income and expenses together with any payments for an additional 12 months.
Do I have enough surplus income to make a Consumer Proposal to creditors?
In consultation with a Trustee, if you have the ability to make a Consumer Proposal, (i.e. your income exceeds living expenses and the excess will result in a reasonable amount being available to the creditors), then a consumer proposal should be considered.
The Bankruptcy and Insolvency Act has also imposes an obligation upon a Trustee that if you file for bankruptcy when you have the ability to make a consumer proposal, it is the Trustee’s duty to bring this matter to the attention of the Court. In such a case, the Court may order that you remain in bankruptcy beyond the minimum nine months, and you may be required to make payments in each of these additional months.
See our Consumer Proposals section for more information.
What happens to my wages during bankruptcy?
After you have filed for bankruptcy, your earnings, such as self-employed income, commissions, or wages and salaries, go directly to you. There are standards supplied by the Office of the Superintendent of Bankruptcy that instruct the Trustee to collect funds, for the benefit of your creditors, from any earnings above what is reasonable for your personal situation and the number of people in your family. These standards are called the “Superintendent’s Standards.” We will review with you what payment you should expect to make in a bankruptcy and for what term.
Who files my taxes for the year of my bankruptcy?
Sands & Associates will assist you with filing your taxes for the year of your bankruptcy. In fact, we’ll usually file them for you if you provide us with all the necessary information. Two income tax returns are required for the year of the bankruptcy. The pre-bankruptcy tax return covers the period from January 1st through to the date of bankruptcy. The post-bankruptcy tax return covers the period from the date of bankruptcy through to December 31st. As of the date of bankruptcy, any prior, pre-, and post-bankruptcy tax refunds (if assigned) are the property of the Trustee for the benefit of the creditors. If you are self-employed, you must file the pre- and post-bankruptcy tax returns as well as any required GST returns.
Who pays the Trustee to administer the Consumer Proposal?
The Trustee’s fees are based on a tariff set by the Bankruptcy and Insolvency Act, and the fees are deducted from the payments made by the debtor, before any funds are issued to the creditors. There is no additional cost to the debtor above and beyond the monthly payment in the proposal.
What is mediation?
The purpose of mediation is to resolve conflict in the following situations:
- Where you do not agree with the recommendation of the Trustee in the Report of the Trustee on the Bankrupt’s Application for Discharge. In this situation, you may, before the expiration of nine months from the date of bankruptcy, send to the Trustee a written request to have the matter determined by mediation.
- Where you and the Trustee cannot agree on the amount that you are required to pay to your creditors because, in the Trustee’s opinion, you could have filed a viable proposal but did not.
- Where you and the Trustee cannot agree on the amount that you are required to pay pursuant to the Superintendent’s Standards. In this situation, the Trustee shall request that the matter be determined by mediation.
- Where a creditor has made a written request for mediation, either within thirty days from the date of bankruptcy or within thirty days after an amendment made by the Trustee regarding the amount that you are required to pay pursuant to the Superintendent’s Standards. In this situation, the Trustee shall request that the matter be determined by mediation.
For further information about mediation, please request a pamphlet from your Trustee.
Can I keep my credit cards?
An individual is not required to turn in their credit cards, however, once the creditor is advised of the Consumer Proposal, it may suspend or cancel credit privileges.
What if my debts are also in someone else's name?
The filing of a Consumer Proposal will not cancel the liability of anyone who has guaranteed or co-signed any debt. These co-borrowers or guarantors will still be responsible for the debts, less any payments the creditor receives from the Consumer Proposal.
What debts are not included in a Consumer Proposal?
There are some debts that are not extinguished by the filing of a Consumer Proposal. These debts include Court fines, any Court award for damages associated with bodily harm or sexual assault, arrears of spousal or child support, debts incurred through fraud or misrepresentation, and student loans incurred within seven years of filing the Consumer Proposal.
Some of these creditors are entitled to file a claim in the Consumer Proposal (spousal or child support, EI overpayments, student loans) which will result in funds being paid to them. The debtor will be responsible for any balances due to them after completion of the Consumer Proposal, plus interest. However, recent Court cases require that EI (represented by Human Resources Development Canada) needs to apply to Court for an Order that the EI overpayment was incurred by fraudulent misrepresentation before they can collect the balance.
What happens if my circumstances change and I can't make my payments?
Working closely with the Trustee, it is possible to file an amended Consumer Proposal if you believe that you can still complete the proposal in a reasonable amount of time. The creditors must be advised of your desire to amend the proposal and they must accept the amended proposal by a simple majority vote. If the Consumer Proposal requires an individual to make monthly payments, and three of the monthly payments have been missed, the Consumer Proposal will be in default. If the Consumer Proposal requires payments less frequently than monthly and the individual misses any payment for more than three months, the Consumer proposal will be in default.
Once default occurs, the creditors will again be able to resume collection proceedings.
What happens if the Consumer Proposal is rejected?
It is rare for a Consumer Proposal that is filed in good faith to be rejected by creditors. Creditors may seek to negotiate some terms of the proposal (payment amount or length) and the individual has the option on whether to negotiate or allow the proposal to be voted down. If the creditors do not accept the Consumer Proposal, the debtor will no longer be protected by the Bankruptcy and Insolvency Act and the creditors will be able to take steps to recover the outstanding amounts. The individual may have to consider taking advantage of a bankruptcy in order to deal with their outstanding debts, but he or she should discuss this with their Trustee.
What happens if I do not complete my bankruptcy or if I am not released from bankruptcy?
If you do not complete your duties as a bankrupt, you will not be released from bankruptcy and the Trustee will proceed to be discharged from your bankruptcy. After the Trustee ceases to be involved in your bankruptcy, your creditors may resume collection for full payment of their claims. In addition, your creditors can again seize any assets in excess of your exemptions to satisfy their claims.
The full performance of your bankruptcy, or the obtaining of your discharge, is what eliminates your responsibility to repay your creditors. If you do not obtain your discharge, the creditors can resume collection for full payment after the Trustee ceases to be involved in the bankruptcy proceedings.