What is the 5 year stipulation of hardship regarding Student Loans if I go bankrupt? Is this a new rule?

September 7th, 2009 by Questions

My last date of study was June 2003 and I am considering bankruptcy due to over 60K in unsecured debts including student loan debts. There is a new rule about including student loans after 7 years but I have heard rumours of special circumstances where student loans could be included after 5 years in cases of financial hardship. Can you comment on this please? thank you.

Posted from: British Columbia

Questions

One Response to “What is the 5 year stipulation of hardship regarding Student Loans if I go bankrupt? Is this a new rule?”



, A licensed trustee said:

The 5 year hardship rule came into affect at the same time as the 7 year rule (July 2008). You just need to do a little more homework to find the details on the net.

To date, I am not aware of any Court allowing the 5 year hardship rule. When the law was enacted the government did not provide the Courts with any guidance on what constituted “hardship” and so far, no one has been willing to test it. The simple fact that you can’t repay bthe debt will NOT constitute hardship. More likely, you will need some sort of disablilty or other reason why you won’t be able to work in the field that you studied at school.

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