Statute of Limitations (Ontario)

Ok so I understand the Ontario Student Loan situation. What about Canada Student loans? Was this also affected? Or do federal loans still carry a statute of limitations, and if so, what is it?

Thanks Johnny. I am currently on interest relief. What would be the process? You just wait it out 6 years and then what?

visko23 wrote: Thanks Johnny. I am currently on interest relief. What would be the process? You just wait it out 6 years and then what?

First, if you are on interest relief then I believe that means you acknowledged your debt so the clock would have been reset.

Second, as already stated this is a horrible strategy for 99.9% of people with student loans. You basically need to get through six years without putting yourself in a situation where it would make sense for the creditor to seek a judgement against you. That is pretty hard to do.  What are you going to do for six years? No major assets, no employment, nothing that would give the creditor any sign that you are not judgement proof.  That is a pretty horrible way to spend six years to get out of $40-50k in debt. Not to mention that even after the six years are up now you are starting a life with no credit history, no real employment history, etc.  You would be much better off just paying the debt.

To not be hypocritical I have to disclose that I did manage to run out the clock on about $70k of federal student loans but I fall into the 0.1% who are in a situation where they can make themselves judgement proof without having to sacrifice quality of life. The purpose of this site is to help people who are experiencing hardship and not to help people cheat the system and I respect that so I will give no instructions on how to accomplish this.

With respect to the second part of the question what happens after six years is that the loan becomes unenforceable via the court system. That is it.  The loan does not go away. You still owe the money. The creditor just can't seek a judgement against you. Once a creditor loses the ability to seek a judgement they basically have no way to force you to pay them. They no longer have the ability  to garnish wages or seize assets. That limits them to asking nicely / annoying / embarrassing you into paying which is not very effective.

With respect to credit after the six years of inactivity the student loans will no longer appear. 

The loans do not disappear. If at any time in the future you acknowledge the debt it will cease to be stat barred.

A stat barred loan does not prevent the government from putting a lien on your tax returns. They generally don't for stat barred loans but they can if they choose to.