Does fraud survive bankruptcy in Ontario? A bankruptcy discharge erases most of a debtor’s financial obligations. However, it does not erase debts built on dishonest conduct. Therefore, for Toronto creditors, recovering money lost to dishonesty depends heavily on how lawyers plead the original claim.
Why Section 178(1) Matters for Creditors
Section 178(1) of the Bankruptcy and Insolvency Act lists the debts a discharge will not wipe out. Specifically, two exceptions are central to civil litigation and collection work:
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