Free Consultation

Student Loan not included in bankruptcy?

I filed for bankruptcy 8 years after I finished university. I completed a master’s program within those 8 years but it was paid for in cash. When I initially finished my undergrad I didn’t find work right away and took advantage of the repayment assistance program (through OSAP) for my student loan. I am told that b/c I used the repayment assistance program at various times in the 8 years, that my student loan cannot be discharged b/c the 7 years would start counting from when I last used the repayment assistance program and not when I last took out the loan/finished school. Is this accurate?

Posted from: Ontario

One Response to “Student Loan not included in bankruptcy?”

Doug Stuive, CA | Trustee | CIRP said...

Yes this is accurate. The Bankruptcy Act indicates the student loan must be seven years old since the date you last attend school in order to be discharged in the bankruptcy. However the way that date is calculated is outlined in the Canada Student Loan Act. The calculation is based on the date that the loan become due and payable. This is often six months after the date you last attended school. Each time you renegotiate a payment plan for the loan you are altering the date that the loan become payable and therefore you are changing the age of the loan.

There are ways you can ask the Court to consider the student loan to be discharged by the bankruptcy. Your Trustee would be able to advise you about this option in greater detail.