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Can I include my student loans in a bankruptcy or consumer proposal?

Student loans are written off in a bankruptcy or consumer proposal if it has been at least seven years since you ceased to be a full-or part-time student.

Any student loans that do not meet this requirement will survive the bankruptcy or consumer proposal process, and you will have to make arrangements to pay the loans in the future. In the meantime, you will be protected from creditor collection activity. It is important to note that interest will continue to accrue during this time unless you qualify for interest relief. Both provincial and federal student loans offer Repayment Assistant Programs, including interest relief.

Under the legislation,  if you have been out of school for more than five years, have acted in good faith with respect to your student loans and you continue to experience financial difficulties, a court application can be made to discharge the student loans.

Some loans that are granted to students attending post-secondary institutions are not considered student loans. These special loans are often referred to as Student Lines of Credit and are offered to students during their post-secondary education. These loans are not student loans and will be extinguished upon receiving a discharge from bankruptcy or upon completing a consumer proposal.

Speak to a Licensed Insolvency Trustee to find out more about how a bankruptcy or consumer proposal will affect your student loan debts.

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