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hardship rule

hi there,
can you please provide a link with information on the five year hardship rule? i will be eligible for this in approximately one year with well over 40000$ in student loan debt and a salary of just over 30000$ but i cannot seem to locate the conditions of this rule. if you could post the link or even provide the details of the rule, it would be greatly appreciated. thank you.

Posted from: New Brunswick

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One Response to “hardship rule”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Under the new student loan and bankruptcy in Canada rules implemented in July, 2008, if more than five years have elapsed between the time you ceased to be a student and you go bankrupt, you may make an application to bankruptcy court to have your student loans forgiven. This is often referred to as the hardship rule.
Ultimatly what happesn is you can have a application to court made (typically done by an insolvency lawyer) and the bankruptcy court will decide whether or not they forgive your loans, either in full or in part. To obtain forgiveness, you must demonstrate “hardship”.

There is no clear definition for what constitutes hardship; each bankruptcy court across Canada may use a slightly different definition.

But ultimately the court will look for evidence that you would suffer financial hardship if you were required to continue paying your student loan, whether or not you received any benefit from your education and whether or not you were acting in good faith.

As you can see these things can be difficult to demonstrate, which is why the application is typically made by your legal council.