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student loans in a consumer proposal

The trustee I spoke to said that my student loan would be included in my proposal but that it would not amount to the same repayment amount as though I had made payments. How does a trustee determine the amount of your proposal that goes to student loans? also my student loan is amortized to the maximum length of time, and based on what the trustee said it means that my student loan would take longer to repay then what I am allowed, is that allowed?

Posted from: Ontario

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One Response to “student loans in a consumer proposal”

A licensed trustee said...

It sounds like you are confusing a couple of different things.

First, if you have not been out of school for at least 7 years when you file a consumer proposal then your student loans may not be deischargeable by the proposal. That means when the proposal is over you may still have to repay whatever is still outstanding on your student loans.

Second, even though your student loans may not be old enough to be discharged, they may still submit a claim and receive payments (called dividends) during your proposal. These payments will simply be applied to the student loans like any other payment. Keep in mind that if you haven’t been out of school for at least 7 years when you file a consumer proposal that interest charges will continue when you file and in most cases, whatever payment the stduent loans receives from the proposal just cover the new interest charges.

Once again, discuss this in detail with your trustee BEFORE you decide to file.