Help please!

First, I'm so grateful, after the ridiculous amount of hours I've spent researching on top of reaching out for help to the bank, HRSDC and even my MP, that I've found this forum. I finally feel somewhat hopeful that I can deal with this situation and stop losing sleep over it all - I really hope I can anyway.

So my situation is such that I graduated in 1998, filed for bankruptcy in 2002 and it was discharged in 2004.  I was making regular payments on the student loans and was living debt free until my world turned upside down in 2005 and I had to urgently leave a marriage with two young children.   

There is a lot of backstory on some really, really rough years, but the bottom line is such that I still owe approx $28K with respect to my CSL.  My financial situation is that I make decent money, I suppose, but due to some really rough times, I have an $11K legal bill that I'm paying off, a line of credit from a family member that I'm paying off (this allowed me to keep a roof over my daughter’s heads for the 3 years it took to receive any child support from my ex - it was not for frills) I am paying for daycare, a car payment and the necessities of life for the 3 of us.  From a financial standpoint, I'm in the hole every month.

I tried to contact the bank to resolve the outstanding CSL and they said that they'd recall the loan from the collection agency and that they would assess my file for repayment assistance, but only if I paid the collection agency $9K.   Unfortunately, that is in no way possible.

I contacted my MP and after 4 months of working with them, they said that HRSDC would only consider writing off my debt if I was disabled.  Thank goodness that is NOT the case.  However, I never did receive that decision in writing from the MP or HRSDC, so I contacted them to obtain it and low and behold they never knew that I had been a previous bankrupt, nor did the bank, even though I had made this known on several occasions.  So, the HRSDC agent told me, based on my details of when I finished school and when I filed for bankruptcy, that I could request an absolute order of discharge to have my student loan included in my previous bankruptcy.

Strange but true point...I have no liens against me...I qualified for a mortgage, my credit is clear and no-one has ever come looking for me for this money...but that scares me and I want to really take care of it because it honestly terrifies me that it will come back and bite me, so I've been trying for years to resolve this and be upfront an honest about my debt.

That's where I employ your knowledge and experience.  I don't know what I need to do.

Can someone please tell me step by step what I need to do and share any lessons learned that could help me with this process.  I need to protect my sanity and my children's livelihoods.

I thank you in advance for your time and for reading this novel, lol, and I promise to pay it forward and return the favour.

Thanks again!!!!

Yours truly!

SingleMomOfTwo.

While I could be wrong (and that could work to my benefit in this case) I hazard that the limitation will not apply to me, since I've contacted the bank, my MP and HRSDC to seek help in trying to resolve the debt.  I've also made a payment as recent as Dec 2011, although payments have been sporadic and minimal at best.  Not sure if that's enough info to determine whether it will apply to my situation or not?

If you want help snapping it together you can holler at me.

My trustee said there was nothing they could do for me,  other than maybe help me file another bankruptcy or proposal, and that I had to talk to an insolvency lawyer.  Last Thursday, I was able to get an insolvency lawyer to agree to meet me for a free consult , but he told me it'd run me $3K-$5K...not an option.  I spoke to the bankruptcy court in Ottawa that referred me to the bankruptcy court in Toronto....which is where I received the advice and then was figuratively shoved into the dark corner of unknown again <sigh>

@SingleMomofTwo

I have contacted the Bankruptcy Court Office in London, Ontario and confirmed that there is NO PACKAGE AVAILABLE at any Courthouse in Ontario to walk you through the Subsection 178(1.1) application process. However, after much discussion, they agreed to send me a copy of an application that was made and that was successful in obtaining their student loans being extinguished in a prior bankruptcy. They will blank out all the personal information but leave the rest as an example or guideline to follow in making a Subsection 178(1.1) application.

I am authorizing Mark O'Meara, Administrator to send you my email address. When you receive it, send me an email and after I receive this package from the London Bankruptcy Office, I will arrange to send you a copy of this package so that you can see a sample of the application process.

I was told by the clerk at the Bankruptcy Office that there is no formal Form number or particular Name to these forms other than they are known as a Notice of Motion with Affidavit and an Affidavit of Service to show that you have served all parties affected by this application. In other words, the application is made from "scratch".

Never having received a CSL or declaring bankruptcy, needless to say, I have never made an application under Subsection 178(1.1), so this is a learning experience for me. When making this application, you do not require the services of a lawyer. It's much like filing an income tax return. Either you can do it yourself or hire someone to do it for you. Your choice.

Some bankruptcy courts have a guide that they do provide bankrupts though. You can also search Canlaw and there should be lots of cases that you can use to formulate and complete your application.  There are a bunch of them here:

All you have to do is review the arguments made in one or any number of cases and you can use that as a guide. Rerading through is good because it will land you some good intelligence concerning these particular applications.

HUGE thanks to you for that!

I can understand your disappointment in your Trustee and that is only because you don't understand the situation. Your Trustee is not a licenced lawyer, therefore, is not able to represent you in a Bankruptcy Court "Hardship" application pursuant to Subsection 178(1.1) of the Bankruptcy and Insolvency Act ( BIA ). That is why he suggested or referred you to a Bankruptcy lawyer. Trustee's fees are regulated and must be approved by either a judge in a Bankruptcy Court or by the Office of the Superintendant of Bankruptcy. A Trustee can only receive fees when a Consumer Proposal is filed and approved or when an Assignment in Bankeuptcy is made and approved by the Office of the Superintendent of Bankruptcy. No Trustee is going to prepare a "Hardship" application pro bono. That is why you were referred to a Bankruptcy lawyer.

First of all, there are no forms or instructions in the preparation of a "Hardship" application. Yes, you can make the application yourself but, unless you are extremely creative and have an in-depth knowledge of what constitutes "Hardship" into the foreseeable future including your inability to maintain continous employment, your application will fail. If the application fails, you can make a second application but before doing so, you would be wise to study the court transcripts and determine why the Registrar ( Bankruptcy Court Judge ) refused to approve the application.

My suggestion to you is to attempt to locate a paralegal who is very familiar with the filing of a "Hardship" application. The paralegal can prepare all the neessary papers complete with backup documentation and file this application in the Bankruptcy Court. The paralegal CANNOT represent you in the Bankruptcy Court, however, you must appear in person so that the judge can cross-exam you on your application. That was the mistake that "SingleMomofTwo" made when she filed her application in the Bankruptcy Court in Toronto, Ontario. She could not attend at the application hearing because she lived in Nepean ( Ottawa ), Ontario ( 5 hours away ) and the judge cannot examine a representative of the applicant. Needless to say, the application failed.

In addition, the application must be filed in the same Bankruptcy Court in which your Discharge was granted. If you cannot locate a paralegal to prepare the application, you should seriously consider engaging the services of a Bankruptcy lawyer who is infinitely familiar with "Hardship" applications. While the fees may seem expensive, consider it an investment in extinguishing your student loan debts.

REMEMBER

He who represents himself has a fool for a client.