Student Loan bankruptcy question
I’m pretty sure the answer to this question is no, but my situation is so darned complicated, I was hoping a big of clarification would help.
My entire loan, provincial and federal, (about 25,000) was given over to the Canada Revenue Agency, who have made a much better effort than the NSLC of hounding me for the money, including seizing my tax returns and threatening legal action.
When I asked them what sort of legal action, they said either an attempt to gain a ruling against me in court and garnish wages (up to 30%) or a private collection agency.
Here’s my question: My student loan has now been laundered from the NSLC to the CRA, and there’s a chance that it might wind up in the hands of a private collection agency. If and when that happens, is my student loan still a student loan? In other words, could I declare bankruptcy if I owed the collection agency that money instead of the government, or is the money still flagged as student debt?
What is important is the guiding legislation that the financing was done under. If it was originally a student loan, it retains that student loan status regardless of who is collecting on that loan.
As a result, for this debt to be dischargeable by a bankruptcy or a consumer proposal you would have to have been out of school for at least 10 years. For more information on Student loans you can review our Student loan blog or simply contact a licensed trustee directly.