Clarification regarding student loans
I am in a financial crisis and have no choice but to declare bankruptcy. I am wondering if my student loans would be included given that the loans date back to when I completed my BA in April 1998. Since then I have not had any student loans , but did go back to school to complete a second degree in the area that i work in as required to keep my job, but did not take any student loans for this. I completed most of this program part time , except for the last year of it, which was completed full time with financial assistance through the University due to my financial situation. In order to include my previous student loans in the bankruptcy does the ten years start from April 1998 (the time I completed the first degree?) or from the completion of the second degree?
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 hinge’s 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 licensed 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.