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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Student Loans Question

It has been almost 4 years since I finished school. I have heard that you may apply to have your Student Loans forgiven after 5 years in the case of hardship. Since I have other debts, would it be possible for me to file for bankruptcy now, and apply for forgiveness after 5 years? Thanks in advance.

Posted from: Ontario

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One Response to “Student Loans Question”

A licensed trustee said...

Banruptcy laws automatically include student loans if you have been out of school for at least 7 years BEFORE you file. The law allows you to apply to the Court for releif under “hardship” after only 5 years, BUT hardship has not been defined. To date, I am not aware of the matter ebing tested in Court so most trustees will advise against filing until 7 years have passed.

If you decide to try for the 5 years you have to file the assignment, then when your bankruptcy ends in 9 or 21 months apply to the Court to have the student debts included. You’ll need to hire a lawyer to make this argument as the lender you used for the student loans and the Crown will likley appear in Court to argue against you. The lawyer will likley charge $2,000 or more to take your case – this is on top of whatever the bankruptcy itself will cost… that’s why most people wait the extra 2 years…