Do student loans collect interest while active in a consumer proposal?
March 24th, 2011 by Questions
Can banks charge interest on student loans while active in a consumer proposal? And can banks report delinquent payments while active in a consumer proposal? I am being told by a big bank that they are intitled to report delinquent payments because even if the student loan is being paid by the trustee ,if the minimum payment is not done monthly they can report it. It was my understanding that was in a proposal that creidtors are only to report that balances are settled in a payment plan and if it is being paid as agreed or not.
Posted from: Ontario
One Response to “Do student loans collect interest while active in a consumer proposal?”
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March 24, 2011 at 7:01 am, A licensed trustee said:
The banks have the right to charge interest only if the student loans are not dischargeable in the proposal (ie you hadn’t been out of school for at leats 7 years when you filed the proposal). They should not be reporting your payments as deliquent as you are not required to make your student loan payments while you are in a proposal – you may if you want to (and many people do) , but you are not required to.
A couple of the banks are quite wrong in their thinking regarding student loans and bankruptcy law, BUT short of hiring a lawyer, there’s not much you can do to compell them to behave. They think they are right and until a Court tells them otherwise they are unlikely to change… You might lodge a complaint with OSFI if you can’t afford a lawyer.