How to Fix Canadian Student Loan Debt Through Bankruptcy

In Canada, student loans are managed through provincially funded programs with strict rules about qualification and repayment regulations. Canadian law does not allow student loans to be included in a standard bankruptcy unless 10 years have passed since you were an active student. However, there are alternative methods for resolving this debt.

Instructions

Difficulty: Easy

1. Let time pass after leaving school. Student loan debts cannot be release during a bankruptcy filing if you were an activity student in the prior 10 years. Any loan older than 10 years can be included in a bankruptcy filing and the debt released.
2. Apply for debt relief through your bankruptcy trustee. Together, you inform the government agency and bank that you are filing for bankruptcy and are in need of debt relief. Provide they with your current financial situation, income and other financial obligations. You may have a portion of your debt forgiven, resulting in lower payments that you can manage.
3. Consolidate your student loan with other debts. Within 6 months of your graduation or leaving school, get a bank consolidation loan for your student loan and credit cards. Make regular payments for at least 8 months. After this time has passed, this loan can be included in a bankruptcy filing as a standard consolidation loan.
4. File a consumer proposal. In Canada, this process is similar to bankruptcy, but results in a lower payment plan to repay a portion of the debt. Student loans qualify under this program and will reduce the debt and interest rates that you are required to pay. A proposal stays on your credit file for 5 years after it is paid off.