Can I re-open my file and include Student Loans?
October 29th, 2014 by Questions
I was discharged from bankruptcy at 6 years and 2 months after my last day of school. When I had gone to my trustee they gathered all of my information and then said that the student loan should be included as my records showed my last day of school to be earlier than it was.
At the end when I was asked to come in to go over the paperwork for my discharge my trustee advised me that my student loans would not be forgiven and I would need to file bankruptcy again after my student loans reached the 7 year mark.
Is there a way to reopen my file or do I simply need to file again – current student loans are $45K.
Posted from: British Columbia
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October 29, 2014 at 9:46 am, Desmond West-Chow, CIRP said:
First I want to take a moment to go over the relationship between a bankruptcy and student loans. When it comes to student loans there are two dates where their relationship with a bankruptcy are of importance. First: the date on which you ceased being a full or part time student. Second: the date on which you filed bankruptcy (the first day on which you were bankrupt, usually the day you signed documents with your trustee). In order for student loans to be cleared by a bankruptcy, there needs to be 7 years between these two dates (instead of the date of discharge). In terms of reopening the bankruptcy, there are some scenarios when this occurs, but this situation would not be one in which it would be beneficial. When a bankruptcy is reopened, the initial date of filing remains unchanged, as such the same bankruptcy would still not clear those student loans. Your trustee is correct in saying that in order for a bankruptcy to clear the student loans, a second bankruptcy would need to be filed once the you have ceased being a student for 7 years (so we have the separation of the two dates mentioned above as 7 years). You may also want to consider a consumer proposal in this case, since second bankruptcies are much more harmful to your credit rating (a second bankruptcy typically stays on a credit report for 14 years as opposed to a first bankruptcy of 6 years).