What happens to my student loans if I file for bankruptcy in

Alberta ?

What happens to student loans in the event of a bankruptcy in Canada or Alberta ?

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 Alberta , 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 Alberta 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, or on moneyproblems.ca) 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.

Do you want to know more new information about student loan?

Prior to 1997, student loans were treated in the same manner as other debts; they were discharged if the debtor filed an assignment in bankrutpcy. In September 1997 the Bankruptcy & Insolvency Act was amended so that student loans were only discharged in a bankruptcy if they were more than two years old. For more information visit our Student Loans: Bankruptcy Canada Blog.

What do I do now?

If you are experiencing problems with your student loan and you live in Alberta , please contact a nearby expert today, to arrange a free consultation.