Got served!

So I have a completely Federal, Canada Student Loan that I haven't made payments on in about 3 years. The past few years they have been taking my tax returns.

The other day a process server shows up and hands me a Notice of Claim. It would appear that I'm being sued by the Minister of Revenue for slightly over $15,000 plus any legal fees they incur.

I live in New Brunswick so I'm not sure what the rules on wage garnishing are around here but I assume that's what they're going to do?? I have read that the CRA can garnish without a court order so I'm confused as to why they wouldn't just garnish and skip the trouble of taking it before a court. Can anyone clear that up?

In the meantime I've been calling the CRA to try and work something out so that I can rehabilitate the loan. I called a week ago and was told I would receive a callback within 48 hours but so far, nothing. Today I phoned and was bounced around to about 4 different numbers and was finally told I would receive a call from the CRA's Legal dpt within 24 hours. We'll see if that happens.

I have been out of College for almost 5 years and if I understand correctly I can declare bankruptcy after 7 years and the loan will be then discharged. If they do start to garnish my wages right now though, can I declare bankruptcy immediately and discharge the loan?

I'm scheduled to go meet with Credit Counseling Services of Atlantic Canada this week and they say they think they'll be able to help.

This has been a real wake up call. I just want to start paying but I'm guessing the gov't is going to drag this on.

Anyway, thanks for reading and I hope to hear back from people that have been through this.

I have been out of College for almost 5 years and if I understand correctly I can declare bankruptcy after 7 years and the loan will be then discharged. If they do start to garnish my wages right now though, can I declare bankruptcy immediately and discharge the loan?

Answer: You havent been out of school for 7 years so you cant discharge the loan.  After 5 years you can apply for hardship... 

The current legislation is that student loans can be included in bankruptcy 7 years after the end of studies and 5 years if you can prove hardship.  I think you are referring possible to American rules of not declaring bankruptcy on student loans...