Canada and Ontario Student Loans
in Bankruptcy, and Negotiating a student loan consolidation
rate
What happens to student loans in
the event of a bankruptcy in Canada or Ontario?
As the level of government funding
for post-secondary education has decreased, the level
of student loan debt in Canada has increased. Students
graduate, but with the weak Canadian economy, good
jobs are hard to find, and it becomes difficult to
repay Canada Student Loans in a timely manner.
If a student with student loans files
for bankruptcy in Canada, the student loans are not
automatically discharged unless the student has been
out of school for more than 10 years.
What can I do about my student loan
if I think I need to go bankrupt?
If you live in Hamilton, and you have
student loans that are more than 10 years old, bankruptcy
may be an option. Please contact
us today, to arrange a free consultation.
If you live in Hamilton and your student
loans are less than 10 years old, bankruptcy is only
an option if you also have a significant amount of
other debts, and want to clear your other debts so
that you can continue to service your student loan.
If your student loan is less than
10 years old, you have three alternatives to bankruptcy.
First, you could contact student
loans and attempt to make payment arrangements that
are affordable given your current income.
Second, you could contact a licensed
credit counsellor (listed in your yellow pages under
Credit Counselling, or on moneyproblems.ca)
to attempt to negotiate on your behalf.
Third, we could attempt to file a
consumer
proposal to deal with your debts. A consumer proposal
for student loans have a greater likelihood of success
if the student loan is at least five years old, and
the proposal term is five years long (so that at the
end of the proposal the student loan is over 10 years
old). To file a proposal, you must be working, or
have a steady source of income.
What do I do now?
If you are experiencing problems
with your student loan and you live in Hamilton, please
contact
us today, to arrange a free consultation.
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