What happens to student loans in the event of a bankruptcy in Canada or Manitoba?
As the level of government funding for post-secondary education has decreased, the level of student loan debt in Canada has increased. Students graduate, but with the weak Canadian economy, good jobs are hard to find, and it becomes difficult to repay Canada Student Loans in a timely manner.
If a student with student loans files for bankruptcy in Canada, the student loans are not automatically discharged unless the student has been out of school for more than 10 years.
What can I do about my student loan if I think I need to go bankrupt?
If you live in Manitoba , and you have student loans that are more than 10 years old, bankruptcy may be an option. Please contact a nearby expert today, to arrange a free consultation.
If you live in Manitoba and your student loans are less than 10 years old, bankruptcy is only an option if you also have a significant amount of other debts, and want to clear your other debts so that you can continue to service your student loan.
If your student loan is less than 10 years old, you have three alternatives to bankruptcy.
First, you could contact student loans and attempt to make payment arrangements that are affordable given your current income.
Second, you could contact a licensed credit counselor (listed in your yellow pages under Credit Counseling) to attempt to negotiate on your behalf.
Third, we could attempt to file a consumer proposal to deal with your debts. A consumer proposal for student loans have a greater likelihood of success if the student loan is at least five years old, and the proposal term is five years long (so that at the end of the proposal the student loan is over 10 years old). To file a proposal, you must be working, or have a steady source of income.
What do I do now?
If you are experiencing problems with your student loan and you live in Manitoba, please contact a nearby expert today, to arrange a free consultation.