Annotated Bankruptcy & Insolvency Act
The Bankruptcy and Insolvency Act is a federal law that allows financially troubled Canadian citizens to petition for debt relief, according to the Office of the Superintendent of Bankruptcy Canada.
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Function
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Bankruptcy only applies to "unsecured" creditors, such as credit card companies and doctors, according to the Office of the Superintendent of Bankruptcy Canada. Its aim is to legally reduce or eliminate debts so financially troubled Canadians can move forward with their lives without the burden of unpaid consumer bills.
Ineligible Debts
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The Bankruptcy and Insolvency Act will not protect any citizen from legal collections activity due to past-due "secured" credit such as auto loans. Also, debts like court fines, child support, alimony and taxes cannot be forgiven or reduced under any circumstances, according to the Office of the Superintendent of Bankruptcy Canada.
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Student Loan Considerations
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Student loans can only be included in a case if they were incurred more than seven years ago, according to the Office of the Superintendent of Bankruptcy Canada. If the loans are less than five years old, they cannot be included in bankruptcy under any circumstances; in cases of proven hardship, the local trustees may forgive student loans incurred between five and seven years ago.
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