D. The Nature and Characteristics of the Orders

Author:Roderick J. Wood
Profession:Faculty of Law. University of Alberta

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1) Absolute Discharge

An absolute discharge is effective on the date that it is made. However, its effect is suspended until the expiration of the time period for appeals or, if an appeal is entered, until the appeal has been finally disposed of.42This has the effect of maintaining the status quo until any appeal is determined.43

2) Conditional Discharge

Several different types of conditions may be attached to a discharge order. The court may make it a condition of the order that a certain sum

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of money must be paid to the trustee. Often this order also specifies the time period within which these payments must be made, as in the case of an order for payment of $75,000 over a period of three years from the date of the order.44The order can provide for periodic payments or establish minimum monthly payments.45The order can also make the discharge conditional upon the performance of some act, such as consent to a judgment,46making an assignment of an interest in a legacy or bequest,47or cooperating with the trustee in pursuing litigation.48The condition must be certain and capable of ascertainment: an order for payment of a certain amount after which the matter is to be reviewed is not permissible.49The order must provide for payment of the funds to the trustee.50The court cannot order that the debtor or the trustee make the payment to a specified creditor since this would undermine the scheme of distribution set out in the BIA.51The discharge is effective on the date that the term or condition is satisfied.52If the condition is for the payment of money, then this occurs when the money is paid to the trustee. If the debtor acquires non-exempt property after the bankruptcy but before the condition is satisfied, it vests in the trustee and is divisible among the creditors even if it exceeds the amount that was required to be paid by the conditional discharge.53If the condition is that the debtor consents to a judgment in favour of the trustee, the condition is satisfied when the consent to judgment is given rather than when the judgment is satisfied. However, the trustee is able to enforce the judgment against the assets of the debtor following the discharge of the bankrupt. The court may also annul the discharge or rescind the order of discharge for failure to satisfy the consent judgment.54

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The court may modify the terms of the order or of any substituted order if, after one year from the date of the order, the debtor satisfies the court that there is no reasonable probability that the debtor will be in a position to comply with its terms.55Courts have looked to the following four factors when deciding whether to modify the terms of an order:56· changes in circumstances that have occurred since the order was made, and whether they were within the debtor’s control;

· evidence that the debtor is unable to comply with the order;

· the credibility of the debtor, which will typically require the debtor to be present at the hearing; and

· evidence that the debtor has made efforts to comply with the terms of the order.

3) Suspension of Discharge

A court may suspend the operation of an order for discharge for a specified period of time. The discharge takes effect once the period of time has elapsed. An order that suspends...

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