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 Topic: Effect on common law partners
Posted: 02/June/2009 at 9:46am |
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I don't personally have any student loans, and am currently making $55000/year. My boyfriend, however, has $50000 in loans, and makes about $40000/year. We have lived together for almost a year, but have never filed joint income taxes, maintained completely separate finances, don't have a signed lease together, and all the bills are in my name. The payment estimator with just his info gives around $370/month, and with mine as a common law partner gives $789/month (ie; not eligible).
I didn't originally think that we would be considered common law in the eyes of student loans, but I called them to be sure. It seems once we have lived together for a year then we are common law. Can I really be held responsible for his loan?
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frustrated-guy
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Posted: 02/June/2009 at 4:27pm |
You are not legally responsible for your boyfriends loans as you never cosigned the loan. You can not be forced to repay his loans ever.
However, the Canada Student Loan program unfairly considers your income if your boyfriend applies for interest relief or the new repayment assistance plan.
You could launch a human rights complaint for discrimination based on marital status as your boyfriend will likely quality for the repayment assistance plan if he was single.
I have heard of couples not getting or delaying getting together because of student loan issues like this. Sadly, the two you may be better off as singles as he could apply for RAP as a single. I know this is not fair.
You may want to write your MP and the federal Minister of Human Resources and Skills Development asking for the repayment assistance plan not to discriminate against couples.
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paulaffleck
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Posted: 03/June/2009 at 1:54am |
Leaving aside the merits of a human rights complaint, you lack legal standing to file. Your boyfriend would have the standing, because it is his complaint that he is treated unfairly. The fact that his repayment requirements affects you by virtue of your relationship with him does not give you legal standing.
The real issue is that people feel a much lower income level should be used to determine qualification for repayment assistance.
I disagree that using total family income, to determine the level of one's repayment obligations, is "discrimination" based on marital status. It's entirely appropriate to consider the real family income when considering whether that person qualifies for repayment assistance. That's not discrimination, it's a consideration of actual real income levels.
Imagine a scenario in which one spouse contributes mostly unpaid domestic labour (such as child care), and works for three days a week for a nearly minimum-wage job. Imagine that he or she, considering only his or her income, would qualify for repayment assistance. But imagine that the other spouse earns approximately $8000 per month. Should student loan lenders not take into account the total family income? To say that they should not consider family income would be absurd.
It's the ridiculously low family income considered to disqualify a person from repayment assistance that is the problem, not the fact that family income is considered, with great respect.
Paul
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frustrated-guy
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Posted: 03/June/2009 at 2:20am |
Everyone on this board is encouraged to follow the law and be truthful about declaring their maritial status when completing their taxes.
However, I suspect because of the unfairness of the repayment assistance plan against couples that are married or common law, there may me many more "roommates" living together on a long term basis that under different circumstances might consider becoming married or common law.
Such "roommates" likely would qualify as singles under the repayment assitance plan.
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Posted: 03/June/2009 at 3:39am |
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Would I be able to claim that we are just roommates rather then common law?
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old hippy
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Posted: 03/June/2009 at 4:14am |
Why mention them at all if that's the case?
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frustrated-guy
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Posted: 03/June/2009 at 4:21am |
The Canada Revenue Agency defines:
Common-law partner
A common-law partner applies to a person who is not your spouse (see above), with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:
a) has been living with you in a conjugal relationship for at least 12 continuous months;
b) is the parent of your child by birth or adoption; or
c) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.
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it appears that roommates would never be able to have kids together and be considered roommates as once kids are involved they would likely be viewed as in a common law relationship and no longer single
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Syne
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Posted: 19/June/2009 at 11:09am |
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The operative word here is "conjugal."
I'll be honest. I've lived with my partner for 3 years. We have no kids and no plans to marry. We do not file taxes together, and we do not claim each other's income. It's almost never in our best interest to do so, and to be perfectly realistic, there's no way to prove to what extent we share, or do not share or whether our relationship is "conjugal" or not.
Paula, the problem with your stance is that you completely seem to miss the point. Fairness aside, the definition of a common law relationship vs. a roommate relationship is unprovable. Yes, people should be honest in the spirit of fairness, but on the other hand, people are going to do what benefits them most.
To that end, I'd suggest using your best judgement when defining "conjugal" as it suits your situation.
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Posted: 19/June/2009 at 12:28pm |
I believe the human rights legislation suggests that one can discriminate in order to provide additional benefits. But using family income means that you dont get the benefit.
The issue here is that it is implied that your spouse is supposed to make your student loan payments if you cant.
A young couple is out of school and not making alot of money. One has student loans, the other doesnt. If single, the borrower would qualify for assistance. Using family income, he or she doesnt. If he/she cant pay her loans, and the spouse doesnt pay, he/she will be defaulted.
Thats the reality.... if you get into a relationship, the other spouse is expected to pay your loans. Thats not what spelled out in law, but how the system works.
Also, there is no accounting of child support in the student loan calculations. What I've seen over the years is that instead of parents having money to help their kids, the money goes to student loan interest.
As for "using your best judgement when defining 'conjugal' as it suits your situation" that wont fly with Revenue Canada and not what this site is about... It should not be 'what benefits them most' -it should be what follows the intent of the law.
Here's a simple definition: if you are boinking, its conjugal.
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Syne
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Posted: 20/June/2009 at 5:48pm |
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I don't disagree with your definition, I just don't think it's anyone else's business -- and is certainly a poor determinant of whether to share financial burdens. Especially in this day and age where 'boinking' and sharing close quarters can mean any number of things.
The spirit of the law is clear, but if I simply say, "We're not common law by legal definitions because we do not share a conjugal relationship" then the fact is, they have to take my word for it. Anything else is a gross invasion of privacy.
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paulaffleck
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Posted: 21/June/2009 at 12:18pm |
Syne, I don't think I miss the point at all. The issue is whether or not the borrower meets the criteria, and if the borrower is in a common law relationship, it is quite fair to consider the common law partner's income when determining the ability of the borrower to pay. The reason that this is fair, is because a borrower in a common law relationship is part of a family with an associated income level, whereas a borrower who is not in such a relationship is not part of such a family with an associated income. He or she truly benefits from only one income - his or her own.
It is true that, in reality, when you decide to have a relationship with another person, their debts and obligations become, in a sense, the couple's debts and obligations. That is the nature of relationships. We take on our spouses' obligations and burdens when we choose them as spouses. For example, suppose I have a relationship with a woman with children from a prior relationship, and we live together. Her biological children, I could maintain, are not mine, but I would never maintain that I have no obligation to care for them or to contribute to their well-being financially, because doing so is simply part of being with my spouse. In the same vein, if I choose a spouse with a certain level of debts, I can expect to indirectly contribute to those debts; otherwise, I would choose a spouse with less financial burdens.
Love is not just a word to describe that exhilaration of being with your soul mate. It's a real-life decision to be with somebody. In this world, that means deciding whether or not you want to shoulder in part their debts accrued during their lives as individuals.
I call this "keeping it real".
-Paul
-Paul
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paulaffleck
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Posted: 21/June/2009 at 12:20pm |
And just for the record, my common law girlfriend sacrificed a LOT while living with me, while I cleared almost $55,000 in personal debt.
I've been the recipient of true love, in case anybody feels I am overly objective.
-Paul
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Syne
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Posted: 21/June/2009 at 2:28pm |
 paulaffleck wrote:
Syne, I don't think I miss the point at all. The issue is whether or not the borrower meets the criteria, and if the borrower is in a common law relationship, it is quite fair to consider the common law partner's income when determining the ability of the borrower to pay. The reason that this is fair, is because a borrower in a common law relationship is part of a family with an associated income level, whereas a borrower who is not in such a relationship is not part of such a family with an associated income. He or she truly benefits from only one income - his or her own.
It is true that, in reality, when you decide to have a relationship with another person, their debts and obligations become, in a sense, the couple's debts and obligations. That is the nature of relationships. We take on our spouses' obligations and burdens when we choose them as spouses. For example, suppose I have a relationship with a woman with children from a prior relationship, and we live together. Her biological children, I could maintain, are not mine, but I would never maintain that I have no obligation to care for them or to contribute to their well-being financially, because doing so is simply part of being with my spouse. In the same vein, if I choose a spouse with a certain level of debts, I can expect to indirectly contribute to those debts; otherwise, I would choose a spouse with less financial burdens.
Love is not just a word to describe that exhilaration of being with your soul mate. It's a real-life decision to be with somebody. In this world, that means deciding whether or not you want to shoulder in part their debts accrued during their lives as individuals.
I call this "keeping it real".
-Paul
-Paul |
Who said anything about love? I'm talking about living with someone and maybe having sex with them. Maybe you have shared assets and maybe you don't. Maybe you each have a car, maybe you split the rent 50/50. Maybe you sleep together only once in a while. Who's to say? You? Me? The government? My point is, coitus and cohabitation do not determine to what extent assets are shared, and they certainly don't determine whether a couple is in love. Don't get me wrong. I understand your reasoning and if we were talking about marriage, then I'd willingly concede to it. However, your situation, while common does not represent everyone's. The truth is, when you decide to live with, and have sex with someone you DO NOT necessarily choose to accept their debts and burdens. Call it unhealthy or messed up, or whatever you want. Just don't assume your definition of a relationship is one size fits all.
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paulaffleck
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Posted: 21/June/2009 at 3:09pm |
It is true that people are, and should be, free to have whatever relationships they desire, and the parameters of those relationships can vary greatly. Obviously, there is nothing wrong with this, and I, being a very socially liberal person, pass absolutely no judgment on whatever relationship two people choose to have with one another.
Completely separate and apart from this social issue, is the issue of the means at the disposal of a debtor, and the consequent ability to pay the loan, and the evaluation of his or her ability to pay. If that debtor is in a relationship that meets the definition of "common law", then the debtor's real ability to pay should be evaluated. It is the debtor's ability to pay the loan, within the context of his or her real economic situation, that is the real issue. This is regardless how the debtor and the person with whom the debtor is in a relationship, choose to categorize that relationship.
[Bear in mind that the living situation that you describe may not meet the definition of "conjugal", however that term has been interpreted. My guess is that it has been interpreted to be largely "fact dependent", which may be somewhat less than helpful.]
The unfortunate bottom line is, in my view: If state dollars were lent to obtain an education, the state is entitled to establish a framework to evaluate each debtor's ability to repay those dollars. These are, after all, tax dollars. I don't think there is anything particularly controversial about that. The nature of the framework will always be disputed by somebody, and perhaps for good reason. But the need for this type of framework is well-justified.
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old hippy
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Posted: 22/June/2009 at 4:29am |
When a debtor who lives at home with his parents is applying for the Repayment Assistance Plan, do they consider the parent's income in affordable payment calculations, to evaluate a debtors "real ability to pay"?
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frustrated-guy
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Posted: 22/June/2009 at 5:26am |
old hippy is correct, in his logic.
There is no legal reguirement for any one to pay your student loan but you. They did not borrow it or cosign, can not be forced to repay a loan that is not theirs.
I can not agree with Paul.
Spouses, parents, aunts, grand parents, .... can not be asked to pay someone else's loan.
Repayment assistance should not be based on anyone else's income but the person who borrowed the money.
The government can not sue your spouse for repayment of your student loan. If the governement could, many relationships would end due to the stress that finances put on the relationship.
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paulaffleck
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Posted: 22/June/2009 at 5:48am |
First, there is no legal obligation to pay another's student debt.
Secondly, I do not know whether the criteria account for debtors who live at home with parents. If the debtor pays less rent, his his ability to pay would increase. However, it is not certain that those living at home pay lesser rent. Merely because we can envisage hypotheticals not captured by the current framework does not mean the current framework is faulty. It only means that there are clever ways to escape that framework.
Thirdly, this suggestion that spouses are being "asked to pay someone else's loan" is much ado about nothing. The focus is the debtor's ability to pay. Debtors in conjugal relationships typically enjoy a larger family income. It cannot be the case that the decision to grant repayment assistance should be made without considering the debtor's true ability to pay.
Fourthly, couples budget according to total income and total debts and one spouse's student debt gets factored into the family budget, just like any other debt.
Fifthly, I will bet any money, frustrated-guy, that if and when you apply for a mortgage, you will gladly list your spouse's income on your pre-approval form. Albeit in a different context, this is an example of how family income is considered in both the granting of credit, and the consideration of a person's ability to pay existing debt.
-Paul
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old hippy
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Posted: 22/June/2009 at 7:37am |
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These are student loans remember...nothing tangible, just a piece of paper - they aren't debts to be pooled like any other debts. At least with mortgage payments - you have a home to live in.
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paulaffleck
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Posted: 22/June/2009 at 9:39am |
You know, I'm really sorry if I sound in any way unconvinced by this comment. On the one hand, I appreciate that there are particular aspects of student debt that makes it distinct from other debt. For instance, students accrue it because of a heartfelt desire to better themselves and lay claim to better opportunities in life.
Intangible? What is intangible about voluntarily putting every spare red cent towards clearing the debt? What is intangible about writing letters for a month keeping a collection agency at bay, while scrambling to pay another student debt?
The action required to clear the debt once undertaken is anything but intangible.
With respect, I do disagree. Sorry.
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Syne
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Posted: 22/June/2009 at 11:52am |
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I don't think there's much to disagree about here.
The parameters used to constitute what is and isn't a "spouse" is of a personal nature. (ie. conjugal.)
Paul. You can validly argue that the government has a right to be given an accurate report of a debtors financial status for purposes of repayment. However, extracting that information by any means other than voluntary conflicts with the privacy rights of the debtor. Since these two rights seem to be at potential odds, the choice whether or not to claim a spouse's income is ultimately a product of the "honor system."
Issue resolved?
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Effect on common law partners