graduate in debt

February 7th, 2011 by Questions

how do the rules differ between loans through the National Student loan service (Ont) and the bank\’s Student Line of Credit when it comes to debt repayment. Can a graduate one year out making $13/hr file a consumer proposal with regards to the Student Line of Credit ?

Posted from: Ontario


One Response to “graduate in debt”

, A licensed trustee said:

Technically, the student loan rules and restrictions apply only to the government loan programs – a student line of credit from a bank is simply a line of credit marketted to students.

Having said that, the banks have been very aggressive about using the Courts to argue their student lines of credit should be treated similarly to the government loans. In bankruptcy this means they oppose the persons discharge and then ask the Court to order repayment of a portion of the debt.

In a consumer proposal the issue becomes one of voting. If the student line of credit is large enough they will impact on the voting for approval and may force a higher rate of repayment. In order to have a concumer proposal approved you need to have 50%+ of the debt by value agree to the terms. When the student lines of credit represent more than 50% they tend to push for very high repayment terms or they simply vote the proposal down.

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