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.
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