Discharge from bankruptcy

Discharge from bankruptcy

A bankrupt's bankruptcy ends automatically after a year from the date of the bankruptcy order, unless the TIB applies to court to postpone this. The TIB may only do this if the bankrupt didn't do the things required of them by insolvency legislation. The court will only postpone the bankrupt's discharge from bankruptcy if it is in the interest of the public to do so. The court should not postpone the discharge simply to punish the bankrupt.

When the bankruptcy order is discharged, the bankrupt's bankruptcy comes to an end and they are released from most of their previous debts and freed from most of the disqualifications that affect a bankrupt. The discharge, however, does not affect the right of any creditor of the bankrupt to prove in the bankruptcy for a debt from which the bankrupt is released. The discharge also doesn't affect the rights of any secured creditor of the bankrupt to enforce their security for the payment of a debt from which the bankrupt is released.

Certain claims are non-provable in the bankruptcy and will therefore not be affected by the discharge of the bankrupt. Creditors with non-provable debts can with consent of the court, proceed with action against the debtor during the bankruptcy, or may proceed with action against the discharged bankrupt without the need to get consent from the court. Some non-provable debts are:

  • Any fine imposed for an offence
  • The obligation to make payment of any sum under an order made in any family proceedings
  • The obligation to make payment of a maintenance assessment under child support legislation
  • any liability under a confiscation order
  • Any liability to pay damages under consumer protection laws for the death or personal injury of a person
  • A student loan
  • Social fund loans

Any assets that have vested in the TIB and that have not yet been converted to money and distributed to the creditors, remain so vested, and are, subject to the rules applying to the debtor's home, not returned to the debtor. After the bankrupt's discharge from the bankruptcy the TIB will continue realising assets and distributing funds to creditors until all value in the bankrupt's estate has been distributed.

Any assets acquired by the debtor after discharge of the bankruptcy order do not vest in the TIB, but belong to the ex-bankrupt.