Student loans, going back to school

February 26th, 2007 by Questions

First of all thank-you, this site has really helped me. Heres my situation, I finished school in May of 1999, I currently owe 45,000 and i have decided that the best solution for me is to declear bankrupcy after my 10 years are up. Currently I\’m unemloyeed and i\’m in the process of having service canada sponser me through school. I was just wondering if this will have any affect on me declearing bankrupcy. Will my 10 years start over once I finsih my new course or will it stay at 1999. The corse i\’m taking is unrealated the the course i graduated from. Another question I have as well is if my wages are garnished and I declear bankruptcy, will they still be garnished or will that stop as well.
Thank-you, and keep up the good work. You are helping alot of good people who have gone through a rough time.


One Response to “Student loans, going back to school”

, A licensed trustee said:

The current state of the law requires you to have been out of school for a minimum of 10 years before an assignment in bankruptcy will deal with your student loans. The law doesn’t say what that means – some Courts have said that if you return to school for a different course of study (ie you received no advanced credit or benefit from your prior studies) and you don’t rely on any new student loans then the 10 year clock runs from the first time you left school. Other Courts have taken a stricter interpretation – school is school – and therefore have reset the 10 year clock when you leave the second time.

In other words, no one can answer your question – it will be up to the Court that deals with your discharge from bankruptcy to decide.

In regards to your garnishee question, if you file bankruptcy (or a proposal) garnishees for civil actions (Small Claims and Civil Judgments) will cease. If you are being garnisheed for support payments, a fine or restitution order, the garnishee will not stop.

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