student loans

April 20th, 2006 by Questions

Must the student loan be 10 years old, or must the student have been out of school for at least 10 years? I rencently returned to school for 1 year several years after graduating, but did not take out new loans.


One Response to “student loans”

, Barton Goth, GCO Inc. Bankruptcy Trustees said:

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 or a consumer proposal.

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…

I hope this is of some assistance.

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