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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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General Bankruptzy Procedure & Anti-Poverty Legislation

If people have major unsecured debt, say
($ 30,000) owing to two creditors; as well as student loans ($ 35,000) owing to two service providers; then what happens if you recently got laid off and employment insurance runs out after your 33 weeks of regular benifits and at least a year of preferential treatment to all creditors were made( min payments were made), and will not have any income after EI runs out.

I assume, in general, that stoping paying everyone is rational? But I can not go bankrupt on student loans due to the 10 year rule. Now, is it not rational for me to just go away for 10 years and come back because the effective payments on this debt is about $ 100,000 considering interest.

Is there no anti-poverty legislation that allows me to go bankrupt on my student loans as well as my unsecured debt? Note that the unsecured debt is a result of being a victom of pergery. ( laywer bill )

Thanks

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One Response to “General Bankruptzy Procedure & Anti-Poverty Legislation”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

There is nothing that will prevent you from filing a bankruptcy in Canada. But you are right that due to the current regulations any student loan debt where you have been out of school for less than 10 years is not cleared.

However, there is a hardship provision in the act section of the act that allows a person, regardless whether the 10 years expires before or after a bankruptcy to make an application to court to be cleared from the student loans. To be eligible, this application must be made after the 10 year mark an you must be able to satisfy the court that you have acted in good faith in connection to these student loans and that you will continue to experience financial difficulty to the extent that you won’t be able to pay the liabilities under the loan. This is typically an application you are required to make and often you may want to consider having a solicitor making this application on your behalf (especially if Student loans is going to oppose this action).