This website is a testimony to the problems Canadian Student Loan borrowers experienced from approximately 1996 to 2008 and until their loans were paid off.

The privatization of the Student Loans system by the Chretien and Martin Liberal governments broke the system and defaulted thousands of borrowers who were trying to pay their loans. There were even stories of suicide due to the harassment of borrowers.

Read the report that I prepared back in 2007 here. Canada Student Loans-The Need for Change Fortunately the new Conservative government at the time revamped the program and fixed the system for new borrowers, but borrowers under the previous program were left with ruined credit and continued harassment from debt collectors.

I call on the Canadian Government to apologize to the borrowers affected by this fiasco and make amends.

Unfortunately the Liberal government is again clobbering the Education system with their changes to International Student Visas. Yes, there's a problem, but instead of a well thought out plan, they have pulled the emergency brake on the train causing a derailment. This has introduced unprecedented instability for both private and public education institutions who serve both international and local students.

Universities have been forced to cancel programs and layoff hundreds if not thousands of full-time and contract instructors.

Again, the Liberal government has messed up the education environment.


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paulaffleck View Drop Down
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    Posted: 04/October/2009 at 10:12am
On behalf of a close friend I ask this question:

My friend last received student loans 8 years ago.  For the last two years he did attend school.  However, E.I. paid his tuition. He is over $80K in debt, and has not yet found work.  He will likely never be able to repay the debt, $50K of which is student loan debt.  Bankruptcy as a true last resort makes sense, but does he qualify?

My question:  Does his attendance at College during the past 2 years "restart" the clock, for the purposes of the 7-year discharge rule?  Does the fact that he did not collect student loans make any difference?  

Incidentally, he would likely be able to show hardship.

Thanks in advance for any feedback.

-Paul
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My understanding is that yes,  he would have restarted the clock.
 
Are his loans in default?
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Mark OMeara
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I'm fairly certain that they are.  I've advised him to seek the advice of a trustee in bankruptcy, but to be extremely careful that whomever he chooses as a trustee is well-versed in how bankruptcy laws apply to student loans, as it seems not all trustees are created equally.

Thanks!

-P
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Points: 5996 		Post Options Post Options   Thanks (0) Thanks(0)   Quote SolveStudentDebt Quote  Post ReplyReply Direct Link To This Post Posted: 05/October/2009 at 3:07am
Hi P
 
It is very important to select the appropriate trustee, you are correct. In a lot of cases some bankruptcy groups do not tell people the whole story in regards to how it will affect student loans, especially for those that are actually in good standing. I suspect that they leave out this information for two reasons. One being that they probably do not understand how it works (although they are required to know and be able to explain it to would-be bankrupts); and two being that they may very well be aware but if they open that can of worms it will discourage people from signing. Bankruptcy groups have been comnplaining about the student loan industry causing huge economic troubles on the insolvency industry since the turn of 1998.
 
Section 178 is worded in a way that says once you have ceased to be a full or part-time student for X number of years you can then include these loans in bankruptcy proceedings. The problem is interpretation (as you know everything is subject to it). 
 
Justy remember though, people misinterpret that "being able to include" their student loans means absolute discharge. That is not the case. Being able to include them does not bind the Crown or any loan body from any form of opposition.
 
Johnny
 
 
 
Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

solvestudentdebt.com
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Points: 155 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 09/December/2009 at 6:44pm
The case law suggests that the end of study date set out in s.178 1(g) relates only to a study period funded by student loans.  The case on point deals with a student who went to school funded by student loans.  Prior to the expiration of the period set out in s. 178, the student returned to school funded by her employer.  The Court held that since the student loans paid by her employer were subject to discharge, they could not be used in determining the study end date.  Consequently, the study end date relates only to the period funded by non dischargeable student loans.  This is not my opinion.  It is the courts.
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Points: 155 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 09/December/2009 at 6:58pm
Johnny makes a valid point with respect to discharge of student loans.

The Act provides that any creditor can oppose the discharge of a bankrupt.  That means a student loan creditor may oppose the discharge of a student loan debtor even if they made their assignment or proposal after the expiration of the s. 178 limitation period.  A hearing is held and the registrar or judge may impose conditions on the granting of the discharge if warranted.  If conditions are imposed, the proceeds are for the benefit of all of the creditors not just the student loan creditors.  Upon completion of the conditions, the debtor receives an absolute discharge.  

If the requisite period under s. 178 had not expired, the student loans are not subject to discharge until a s. 178 1.1 application has been made and hardship relief granted.  Otherwise, the debts remain due and payable.
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Your post that it only relates to "a study period funded by student loans" needs to be clarified....  If you get loans in your first and second year, then dont get loans in your third and fourth... the end of study date is the end of the fourth year....  

Need to be careful how you word things here...
 
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Points: 155 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 19/December/2009 at 5:31pm
"study period funded by student loans" relates to the particular legislation under which the loans are granted.  In some cases, that means at the end of any loan deferral period.  As Mark points out, if you have student loans for years one and two and none for three and four, the end of study date is at the end of year four because of the legislative deferral to the end of year four.

"study period funded by student loans" applies usually to two different study periods,  One funded by student loans and the other not.
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Points: 156 		Post Options Post Options   Thanks (0) Thanks(0)   Quote paulaffleck Quote  Post ReplyReply Direct Link To This Post Posted: 21/December/2009 at 12:59am
Stuff,

Could you provide me with a citation?  Might it be available on Quicklaw?

Thanks,

-P
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Points: 155 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 21/December/2009 at 11:14am
As requested by paulaffleck:
Registry: Halifax
District of Nova Scotia
Division 03 Sydney
Court No: B-39152
Estate:  51-104077 / 51-104078 
In the Matter of the Bankruptcy of Timothy Lloyd McNutt / Jennifer Lynn McNutt 

In McNutt, Tim had fed and NS student loans for an earlier period and fed and ONT for a later study period.  The Court held that one study period in one regime did not influence the end of study date in the other regime.  Granted hardship relief for regime one and adjourned hearing so he deal with regime 2 when that limitation period ended.

another case of interest:


refers to another bankruptcy as a possible condition to grant hardship relief

I have other cases if anyone is interested.  
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