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You cannot declare bankruptcy if you have been out of school for less than seven years and expect to have your student loan debt discharged. But there are other options that may free you to move forward in life.
Talk to a bankruptcy trustee—even if your loan isn’t eligible for bankruptcy, it may be eligible for a consumer proposal. As experienced debt counsellors, a trustee may be able to see solutions to your problem. If you have other unsecured debts, it is possible that bankruptcy may give you enough room on your monthly income to meet the payment demands of your student loan.
Try to negotiate a smaller monthly payment with your lender, either through a lower interest rate or a longer term on the loan. Statistically, your income is going to improve the longer you are out of school, so you may be able to make a lump sum payment in a few years or increase the monthly payment without suffering.
If your lender is unwilling to renegotiate your loan, a credit counsellor can often help mediate the situation and make the deal happen. Using a credit counsellor, especially if you make the changes he or she suggests, demonstrates that you are taking the situation seriously and have evaluated your finances with an experienced third party who believes that your current debt servicing levels are unmeetable.
IN THIS SECTION
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- Why did my trustee tell me to file all outstanding tax returns?
- I’m declaring bankruptcy because of taxes. Is this allowed?
- Will I still owe my student loan after bankruptcy?
- I can’t afford to pay back my student loan and it’s been less than seven years since I left school-what are my options?
- How long does bankruptcy last?
- Can I keep my car during bankruptcy?
- Can I keep my RRSP during bankruptcy?
- Can I keep my home if I declare bankruptcy?
- Will I still be able to rent an apartment or home if I declare bankruptcy?
- Can I keep a credit card during bankruptcy?
- Is it okay to use a credit card if I am thinking about bankruptcy?
- Can I get a checking account after bankruptcy?
- I co-signed on a loan for someone who declared bankruptcy. What happens now?
- If I’m married and I file for bankruptcy, does it affect my spouse’s credit?
- If my spouse declares bankruptcy and I am listed on their credit cards, am I responsible for the debt?
- I am divorced and my ex has declared bankruptcy. Do I still owe for debts and credit cards that I co-signed with my spouse?
- If I file for bankruptcy, will it be noted on my spouse’s credit file?
- Will filing for bankruptcy affect my job situation?
- Who will find out about my bankruptcy?
- Can I get utility services (telephone, cable, hydro, gas, etc.) after bankruptcy?
- Can I keep any money if I declare bankruptcy?
- What is surplus income?
- Can I go to jail for not paying my debts?
- The collection agency is threatening to take me to court: can they do that?
- What happens if a collection agency takes me to court?
- I am behind on my debt payments; can a collection agency take my furniture, electronics, clothes, etc.?
- I am being harassed by a collection agency: what can I do?
- Can I stop a wage garnishment?
- How do I find out if someone is bankrupt?
- What is Chapter 7 bankruptcy?
- What is Chapter 13 bankruptcy?
- What happens if I live in both Canada and the U.S. and declare bankruptcy?
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