Consumer Proposals and Student Loans

Saturday, January 14, 2017 - 21:50

Consumer Proposals, Bankruptcy, Government Debt


If your student loan is causing you financial hardship, it is a good idea to have an in-depth discussion with a bankruptcy trustee.

Student loans through the Canada Student Loans Program can be included in a bankruptcy if they are more than seven years old. That is – if your end-of-study date is more than seven years ago. I would recommend everyone with a student loan that is considering bankruptcy should call Canada Student Loans and ask what they have on file for the end of study date, as many people are unsure of the actual date.

The end of study date can be confusing, especially if there has been a return to studies since the initial loans were obtained. Recent court decisions have held that the ‘clock’ does not reset on a student loan if the borrower returns to school later on, however; this is a bit of a confusing issue and is definitely something you should discuss with a trustee in order to find out where you stand.

If your Canada Student Loan is less than seven years old but more than five years old, there is provision for a debtor to apply to have their student loans included in either their bankruptcy or consumer proposal. In order to be considered for this provision, you must have acted in good faith in taking out and attempting to repay your student loans and you must show that you would experience undue hardship if you had to wait a further two years.

Again, if you think this applies to you it is best to contact your trustee to find out more. 

If you have questions about consumer proposals and are wondering if your student loan would be included, contact us today. We are open late and on weekends to make it easier for you to meet.