Changes To Student Loans In A Bankruptcy

2008-06-16

Currently, Student Loans are not dischargeable in a bankruptcy until you have been out of school for 10 years.  The proposed legislation will change this to 7 years.  The new 7 year rule will apply to those who file for bankruptcy after that date, AND to those who are not discharged from their bankruptcy at that date. There are also currently provisions to apply to discharge a Student Loan for "hardship" reasons once your 10 years are up.  This means that if you filed for bankruptcy more than 10 years ago and are still unable to pay the Loan, you can apply to discharge the debt under these "hardship" provisions.   The proposed legislation will change this to 5 years.  This new 5 year rule will apply to all bankrupts - past, present, and future. So....in your scenario....if you were discharged from your bankruptcy, only the proposed 5 year "hardship" scenario will apply to you.    Donna Carson Calgary, Airdrie, Drumheller (403) 537-7657