loans and credit debt

Nothing can prevent you from filing bankruptcy, but you need to be aware of the rules surrounding student loans.

The Section of the Bankruptcy and Insolvency Act that deals with student loans is 178(1)(g). It sets two conditions under which a student loan may not be discharged by bankruptcy.

The first condition is that the bankrupt is still a student when they file.

The second is that it has been less than 10 years since the bankrupt ceased to be a full-time or part-time student.

The question seems to hinge on your status as a student. The Act doesn’t say it, but the general interpretation has been “a student continuing the same line of studies”.

By that I mean if you started a BA, dropped out and then went back a few months/years later and completed your BA the clock would start after you completed your BA. (The last day you were registered as a student.)

Using a similar example, if you started a BA, dropped out and then decided to go to college to become a CNC operator they would probably start the clock when you ceased being a BA student (unless you borrowed more student loans to train for the CNC machine).

If there is any doubt as to whether or not your student loans are dischargeable you may ask your trustee to schedule a hearing and allow the Court to decide. Of course to do this you must have already filed bankruptcy and therefore you need to be prepared for whatever the Court might decide to do.

As well, filing a bankruptcy will impact your ability to obtain student loans in the futures so prior to filing I suggest you review this issue with a licensed trustee.

I hope this is of some assistance.