Free Consultation

Student Loans in Collections


I would like to know, if Canadian and Ontario student loans are in collections does that still fall under having to wait for 10 years before you can file bankruptcy. I was my understanding that a collection agency pays out the company and then goes after the person owing the debt meaning it is not considered a student loan anymore and just an amount owing. Am I wrong? Do we still have to wait the ten years if it has been in collections for over 5 years?

One Response to “Student Loans in Collections”

A licensed trustee said...

Unfortunately, you are wrong. The “nature” of the debt (ie student loans) doesn’t chnage if/when the debt is sold. Further, in most cases, collection agencies don’t buy old student debt, they simply negotiate a commission on any payments they may recover.

The 10 year clock remains… you may file a proposal or even bankruptcy to buy yourself some time, but until 10 years have elapsed, the student debt survives.