Student Loans in Collections

June 9th, 2007 by Questions

Hello,

I would like to know, if Canadian and Ontario student loans are in collections does that still fall under having to wait for 10 years before you can file bankruptcy. I was my understanding that a collection agency pays out the company and then goes after the person owing the debt meaning it is not considered a student loan anymore and just an amount owing. Am I wrong? Do we still have to wait the ten years if it has been in collections for over 5 years?

Questions

One Response to “Student Loans in Collections”



June 11, 2007 at 2:14 pm, A licensed trustee said:

Unfortunately, you are wrong. The “nature” of the debt (ie student loans) doesn’t chnage if/when the debt is sold. Further, in most cases, collection agencies don’t buy old student debt, they simply negotiate a commission on any payments they may recover.

The 10 year clock remains… you may file a proposal or even bankruptcy to buy yourself some time, but until 10 years have elapsed, the student debt survives.

Please post a follow up comment below:

(Note: comments are reviewed by moderators and then posted after approval. In addition, due to high volume some of the comments might not be posted.)