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Student Loan Payment While Bankrupt?

I am considering personal bankruptcy and have student loans less than 10 years old. Would I be expected to make student loan payments during the bankruptcy? If so, how would this affect the surplus income calculation?

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One Response to “Student Loan Payment While Bankrupt?”

A licensed trustee said...

Good question – we haven’t seen this one in a while.

If you file bankruptcy or a consumer proposal the expectation is that you will NOT continue to make your student loan payments. This applies even if the student loans are not 10 years old.

If you want to continue to make your student loan payments you will need to contact the bank handling the loans and advise them of your intention – otherwise the payments will stop.

Unfortunately, if you decide to make the payments, your student loan payments do not qualify as a deduction from your income for surplus income calculations. If you choose to make the payments they are considered a discretionary expense and therefore they won’t be deducted from your income when your surplus income payment is calculated.