student loans and back to school
I have filed for bankruptcy. I have been notified that my student loans will not be extinguished as a result. On December 31st 2008, I will have reached the five year mark since I have been out of school. I realize that the term is seven years to have student loans included in my bankruptcy. Is there not a 5 year clause? Also, if I decide to go back to school in January 2009 as an independent student to do one language course, will this mess up my seven year term? If I have to wait the full seven year will there be a way of including the school debts retroactively in my bankruptcy and what are the terms and conditions?
Posted from: Quebec
There is a 5 year rule. This rule is measured from your last attendance at school. So if you go back to school your 5 year period will start over.
The 5 year rule is a hardship clause which essentially states that if you have filed for bankruptcy and been out of school for at least 5 years, if you can demonstrate that you did not benefit from the schooling attained and paying back the loans will continue to be a significant burden, then the court will look at ordering the student loans cleared as part of the bankruptcy.
This is an additional application that is typically made after your bankruptcy is finished and is done by a lawyer, not a trustee.