Discharge Of Student Loan Debt

2008-03-12

Sheldon, The law to change the Bankruptcy Act has actually been passed, but not yet proclaimed in effect. The amended law would reduce the ten year period to seven. The Senate is currently holding hearings that may result in further amendments. Several groups have recommended a period of less than seven years, but it is not clear yet what the senate committee will recommend. I expect the amended law to be in effect by the end of this calendar year (as does the CAIRP - the association of insolvency professionals) but the exact date is not known. And, of course, if there is an election this whole process may go by the wayside. To be clear, the law as it currently stands has the ten year requirement. A person can go back to the courts after ten years (even if the bankruptcy was before the ten years) and plead hardship - the court can then discharge the student loans at that time. One of the amendments not yet in effect would allow the courts to order partial repayment of the student loans - as it stands at the moment it is an all or nothing thing. Please feel free to call if you would like more information. Ian Schofield MNP - Regina