Credit Ramifications
I have three student loans that are in collections and three credit cards, on all of which I am paying minimum monthly payments. All the while, I am battling the rising cost of living in Calgary, as a single person. If I were to declare bankruptcy, would it have to include all my debts, or could it be just for the student loans under the new legislation? The reason I`m asking is that I would still like to maintain some form of credit (i.e. one credit card), as you can`t even park your car in downtown Calgary without one these days! But I would like to be rid of my student loans and the headaches of dealing with the collection agencies. Also, if I didn`t have the student loans hanging over me, I might have some hope of purchasing a house, but not if I have no credit for the next 7 years! Can you please shed some light on the ramifications of this type of bankruptcy? Thank you.
Posted from: Alberta
Sorry – it looks like we missed this one.
The short answer is if you file for bankruptcy you must include all of your unsecured credit – that means to deal with the student loans you are going to lose all of your credit cards and access to unsecured credit.
The concept is “equitable treatment” under the law – all of your creditors have to be treated in the same manner if you want to take advantage of the Bankruptcy and Insolvency Act.