What are my Options if my Student Loan is less than 5 years old?

Under bankruptcy law in Canada, a student loan is automatically discharged in a bankruptcy if it is more than seven years since you ceased to be a student.

As well, if you have been out of school for more than 5 years, you can declare bankruptcy, and then at the conclusion of your bankruptcy apply to court under the hardship provision and ask the court to discharge your student loan.  There is no guarantee that the court will actually allow your student loan to be discharged.

In simple terms, if the main reason for declaring bankruptcy is to eliminate a student loan, bankruptcy is generally only the correct option if you have been out of school for more than seven years.

For student loans less than seven years old, a debt management plan through a credit counsellor may be an option, or you may consider negotiating payment arrangements directly with your lender.

If you have other debts, bankruptcy may still be an option.  By dealing with your other debts you may free up enough cash to service your student loans.

If you believe bankruptcy may still be an option, please contact us today.