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Getting student loans during bankruptcy

I am considering going the bankruptcy route due to debt accumulated from a divorce and a layoff from my job. I went back to school, but I am struggling financially. I have two questions. First, can I file for bankruptcy to zero all my other debt, but still keep the student loans I already have? And two, will my filing for bankruptcy affect my eligibility for getting further student loans after I file?

One Response to “Getting student loans during bankruptcy”

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

Student loans have special status under the Bankruptcy and Insolvency Act. In order for you to be discharged from a student loan debt at least seven (7) years needs to pass since since you last attended school. Even if it has been less than seven years, you would still have to list the debt on your bankruptcy documents, but you it would survive your bankruptcy. You would have to make arrangements to repay the debt like any other student.

If you are still in school, including the student loan debt on your bankruptcy documents does not prevent you from obtaining your next instalment on your current student loan. In most cases your loan officer will request that you get a letter from your bankruptcy trustee outlining the details of your bankruptcy, confirming that you have not listed student loan debt on your bankruptcy that will be discharged, (ie. Older student loans) and that your trustee will not seize the student loan funds once they are issued. Most trustee should be able to provide you with this letter. Canada and Ontario Student Loans are subject to their own laws and provisions so these current practices may change. At this time though, your current student loans would not prevent a problem when filing a bankruptcy .