New cohorts of students have recently been starting schools and colleges, while others are going back to continue their studies – and it is an increasingly expensive business. An issue facing the vast majority of students is that of student loans and the spectre of repaying them. For some individuals, it will prove impossible to pay off student loan debts for many years.

Is bankruptcy the answer?

Whilst bankruptcy is a prospect few may relish, it could be the route of choice if repaying a student loan is not possible. However, understanding the requirements for bankruptcy is critical. We set out the basic principles that will help you if you are considering bankruptcy for the purpose of expunging your student loans:

The 7-year rule: at least seven years must have passed since the date you ceased being a student (whether full or part time). You may then either file for bankruptcy or submit a consumer proposal (a consumer proposal is a process in which you may settle your debts with creditors without declaring bankruptcy)
Discharge: a discharge from bankruptcy releases you from any obligation to repay your student loans (if filed according to the 7-year rule) and other debts
5 Years – Undue hardship: the court can reduce this to five years, if repaying the loan will cause undue hardship. You must be able to demonstrate that you have acted in good faith by looking for employment and making regular repayments where possible; and you expect to continue experiencing financial difficulties
Returning to studies: if you go back to school after you ceased being a student – but do not take on any further student loans – it should make no difference to the original 7-year period i.e. it will not ‘stop the clock’

What should I do?

Speak to our experienced bankruptcy lawyers. The bankruptcy and insolvency lawyers at Rogerson Law Group have successfully obtained orders for many students, enabling them to get on with their lives without years of carrying the burden of student loan debts.

We will discuss your options with you and advise on the best course of action for you in your particular circumstances.

Our Student Bankruptcy Loan Lawyers are available in the entire Greater Toronto area with office located in downtown Toronto & Barrie.