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Filing for Bankruptcy with student loan

I have debts that i can not pay and was thinking about filing for bankruptcy. I was wondering if i file now and i have an outstanding student loan (approx. 5 years old June 2004) can I have the loan included if i still have a year and half to go before i`ve been out of school. Or should i wait until the student loan turns 7 years old?

Posted from: Ontario

One Response to “Filing for Bankruptcy with student loan”

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

If you filed for bankruptcy now, your student loans are not automatically cleared by the bankruptcy. You would have to make a hardsip application to the court. The problem with the hardship application is that it isn’t guaranteed. There are a number of criteria you have to demonstrate (i.e. not having benefitted from the education, good faith etc.) and some of these can be difficult to demonstrate. So be advised that this type of application is a risk.

The difference is if you wait until 7 years has elapesed then the context doesn’t matter, the student loans are automatically cleared.