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Is it true that after 10 years out of school i don’t have to pay back osap?

hello
i took osap in 2000 after a year and half i couldn`t finish the program because i had surgeries and i went through a divorce so in 2003 i fill for bankcruptcy i was doing my minuim payment on time so the interest keep growing and get out of control from 10.000 to 16.000 what can i do know it is true that after 10 years out of school i don`t have to pay back osap ?

thanks kindly

Posted from: Ontario

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One Response to “Is it true that after 10 years out of school i don’t have to pay back osap?”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

I think you may be mistaken. Firstly the student loan rule when you filed bankruptcy is 10 years, you are correct on that. However, the student loans are only cleared if 10 years had expired at the time you declared bankruptcy.

Now things have changed a little. In July 2008 this 10 year rule was reduced to 7, so currently if 7 years has since you last attended school (again measured at the date of bankruptcy) then your student loan would be cleared.

So in your situation your debt will not simply expire after 10 years you wuld have to file another bankruptcy or a proposal for that to happen (and you wouldn’t have to wait until 10 years has elapsed you could do it after 7 years.

The other alternative is that you can hire a lawyer to make a court application to request the loan be cleared. There is now a hardship provision in the Bankruptcy and Insolvency Act that stipulates if 5 years has expired the court can order the loans be cleared if hardship can be demonstrated. This is a fairly new section of the legislation and as a result there is no clear definition of hardship, but a lawyer would have more information pertaining to this.