Bankruptcy and student Debt

 Yes, that is what I am saying, unfortunately. People can excercise their right to motion a section 178, however, the chances of an actual discharge are slim to none.

This raises yet another concern regarding the challenge to have the 10 year limitation period reduced to 5 years. The only difference is that people will be able to request a section 178 after 5 years from ceasing to become a full or part-time student. This charter challenge doesn't make it any easier to succesfully execute a section 178. It will be just as difficult with or without change.

 So, how will this challenge to reduce the limitation period to 5 years make any real difference?

 Johnny  

I filed a consumer proposal in 2000 that was rejected by HRDC.  Mostly I blame the attorneys here as they had not done their homework.  My trustee seemed almost catatonic for most of the conference call. The firm I retained was Deloitte Touche.  Afterwards I talked to the trustee and he said that HRDC accepted consumer proposals all the time for a smaller percentage of the debt.  I was told by a paralegal at consumer litigation in justice that they were prevented by law in accepting consumer proposals.  As I was not living in Canada I couldn’t proceed to bankruptcy to see how this might have been handled in court.  The judiciary is another branch of government though and if there were egregious errors in the handling of the case I imagine that there'd be some understanding by the judge. 

Not sure how they would rule on an extreme case of destitution.  Maybe the more humanitarian route would be to just create debtor prisons with a maximum stay of a year.  Of course conjugal visits and a full service pub would be mandatory.

Blah I don’ think you are going to find a more corrupt country masquerading as a democracy than Canada at the moment.  When Paul Martin goes on about this culture of corruption and cronyism in Ottawa he must be talking about something specific.  He would know as he was finance minister and he got lucrative government business and tax breaks for his company. Why is this not being covered by the press?  And then there is Jane Stewart at HRDC with her billion dollar grant scandal.  That is where my money was lost.  There is no accountability and no transparency or compliance with the rule of law in Canada. You have rogue civil servents and they do as they please. There is no oversight. 

Cheers

I hear the Charter challenge is being heard this month.  A decision will no doubt take several more months.  I would have thought that the "class" being discriminated against is students, but I guess that is not considered an enumerated ground under the Charter (whereas age clearly is).

I am waiting for the outcome and hope it is successful.  I have $50,000 + in student loans that I could quite literally be paying for the rest of my life since I can't afford the amounts that would reduce the principal. 

What do you call a system where a loan survives in perpetuity?  USURY.  To boot, the interest rates that students are charged for government loans are obscene.  The maximum we should be charged is prime rate.  But it's prime plus 2.5%.

The whole point of debt reform—and this should include student debt—is to ensure that there is a capability to recover from misfortune and to rehabilitate the debt in some way.  Bankruptcy has traditionally been that option.  If bankruptcy for student loans is simply a charade then the situation of student loans debtors is defined by a condition that has been described as inhumane by reformers over the last two hundred years.  It is cruel and unusual punishment. Even criminals are given a chance at a total pardon.  To hold a debt in perpetuity, collecting interest and amassing, when a person can obviously not pay is barbaric.  It’s a form of slavery where the debtor becomes an asset of the state to be milked eternally.

The thought that there is a cadre of “elite” lawyers representing CSL that have a special relationship with the courts and that justice is in fact stacked against the debtor is a direct affront to the Charter of Rights and Freedoms.  This is not a situation that is sustainable and eventually the student loan system will have to undergo real reform. 

If the period required for discharge is changed from 10 to 5 years then there may be a flood of new bankruptcy claimants.  If all claims are refused by the court then the sham being described in this thread will quickly be exposed and perhaps serve as a catalyst for reform.

What is needed are job created programs and work options for people who cannot afford to pay.  It could be some kind of public service program.

There is already a recognition in Ontario that lawyers need to start working on a contingency basis to help individuals whose rights have been trampled on by government agencies.  Right now there is no mechanism for aggrieved individuals to challenge the government if there is misconduct and over charter rights.  Lawyers are simply too expensive.  The CCLA  seems primarily interested in protecting group rights—“minority rights”—and not the individual rights of all Canadians.  That is fine but a more comprehensive and inclusive civil and human rights organization should exist as well in Canada. 

I think this forum is an excellent place for airing these views. Perhaps a brave reporter might look around here and expose the hypocrisy that exists in Canada.  If Canada is a country of compassion and enlightened human programs then it need to extend that philosophy to the student loan system. 

Cheers

So let me get this right...

Please forgive my naivity.....

I finished school in 1994

bankrupt in 1999

discharged in 2000

I have been discharged 4 years, out of school for 10, but I will always owe my Student loan?

WOW_

i think that since you have been out of school for 10 years then you have options (i.e. apply to have you SL's included in your bankruptcy or go bankrupt all over again)  i was referring to those of us who are still students or those who have not reached the 10 year mark as far as being out of school.

maybe there is a light at the end of your tunnel after all.

I'd sure like some clarification on this issue...

After reading through this tread my understanding is that, once I'm in a position to claim bankruptcy (after 10 years according to the current law), I will likely not be discharged of my student loan debt - that it is a common practice of the courts to deny discharge. Is this correct?

When I read this I was shocked and dismayed. I've been struggling for over 7 years to make monthly payments on my student loans in the hope that, once I am discharged of my debt through bankruptcy, I will be free to start rebuilding my life financially. My debt is enormous (undergrad and graduate school, borrowing twice as much because I am a single-parent) and has grown to more than $85,000 because of interest over the years. Until recently I was only paying $150/month (total to all creditors) but recently increased payments to total $225. Not much - and it hardly touches the interest. After years in underpaid employment I'm finally building a career in my field and earning a reasonable wage - but it's barely enough to make ends meet (cost of living in Vancouver!). So... even though I struggle to feed, clothe and house my family, some judge is going to look at my situation and say, "I believe you're in a position to pay off this debt"???  Come on!!!

I didn't intend on being in this position, but I am and I'm keeping my fingers crossed for a successful ruling on the Charter Challenge. I have to remain positive that changes will occur that will help each and every one of us. I'm a fighter and will attempt bankruptcy even if the odds are against me!

Tangotori

so, say you had to go bankrupt due to consumer debt and not you SL's because say they were not in default at the time of your bankruptcy.  and say you couldn't find suitable employment for 1,2,3,4....etc. years and thus couldn't pay.  and then say you got lucky after those years and got a decent paying job say around $50K per year and could finally begin paying.  this would mean that your debt has grown considerably due to interest during the years you couldn't pay.  so instead of owing say $60000 you owe $80000 at the time you could begin making payments.  then your decent paying job will still leave you living near the poverty line once your SL payments are made especially if you have children.  so that means that for the rest of your working life (literally for those of us who are 40+ years old) you will be paying on your student loans with no chance of ever paying them off.  not to mention the fact that you can do nothing for your children in terms of helping them to have a better start in life.

what is really killing me is the interest since i don't qualify for interest relief because i filed bankruptcy before may 11, 2004.  when i filed bankruptcy, it was not due to my student loans.  in fact i did not even list them on my bankruptcy as i was well aware of the 10 year rule and i was also still in school at the time.

i have no problem paying back my loans when i find suitable employment.  i just don't like the idea of my loans growing and growing during my years of inability to pay.

so what should someone in my situation do?  what do you do when you fall through the cracks and any implementation of relief doesn't apply to you.

i have a friend who owed $70000 in back child support payments.  he went to court and showed that his income was under $12000 for each of those years and this was why he was unable to pay.  the court reduced his amount owing to $10000 and when he's done paying that, he's done.  no interest, no ongoing payments.  ok, ok, maybe you don't believe me so i'll come clean.  the reason that i know this for a fact is that this friend is actually my brother. 

during the years he couldn't pay, the government kicked in in the form of mother's allowance.  so essentually, the government LOST money.  this is no different than SL's.

so if the government is willing to reduce child support payments in the event of "low/no income"  why are they so adverse to reducing SL's.  or are dead beat parents lessor "criminals" than student loan holders? 

and by the way, my brother is no "deadbeat".  he did everything he could and acted in good faith, he was simply unfortunate in that he was a factory worker who had no education and got laid off with no job prospects.

the point is that people find themselves in difficult situations just by luck of the draw. not on purpose.  and they shouldn't be punished for situations to which they have no control.