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Student Line of Credit

I have a `student` line of credit from a bank. This is not a government student loan. Is this considered a student loan in the bankruptcy process meaning that I cannot make this go away until after 7 years until my studies have passed? I thought that the protection is only to government sponsored student loans, not loans or line of credits disguised as `student line of credit.`

Posted from: Ontario

One Response to “Student Line of Credit”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Technically the student line of credit does not fall under the standard student financing sections of the legislation, so if you look at the Bankruptcy and Insolvency Act it would not automatically fall under the section that deals with debts that are not released by bankruptcy.

However, the legislation is not the final say, the court is and there seems to be a trend that if the bank opposes your discharge the court will often rule that you benefited from the education, same as you would have if we were financed through the government backed process and therefore survives the bankruptcy. The unfortunate thing is that a) the court has the ability to do this; b) we don’t know if the bank in question is going to oppose; and c) if the bank does oppose we are not guaranteed that they court will rule the debt survives. So there clearly is some uncertainty with this, but uncertainty that cannot be avoided.

What I would recommend is that you contact a local trustee and they can enlighten you as to the typical way your local court handles these matters.