Extinguishing Student Loan Debts

2009-09-24   minute read

Curtis, Effective July 7, 2008, Canada and/or provincial student loan debts are forgiven in a bankruptcy if your studies ended more than 7 years before the date of bankruptcy. This is a reduction from the previous 10-year rule. Of note, an individual who has been through a bankruptcy already, and has been out of school for more than 5 years, can make an application to the court for an order discharging their student loan(s). This is often referred to as a "hardship application" and the process for making such an application varies by province and jurisdiction. Generally speaking, however, the individual must satisfy the court that: a) they have acted in good faith in dealing with their student loan debts (i.e. an attempt has been made to make payments) and b) that the individual has and will continue to experience financial difficulty to such an extent that they will be unable to pay the debt. Brad Milne CIRP Trustee in Bankruptcy Brandon, Manitoba

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