Archived Urgent Help Needed Posts - Discharged Absolute 1996-03 New Loan App Help

Discharged Absolute 1996-03 New Loan App Help

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Topic: Discharged Absolute 1996-03 New Loan App Help

Posted By: MojoJojo
Subject: Discharged Absolute 1996-03 New Loan App Help
Date Posted: 07/June/2013 at 1:21am

Hi and thanks for having this great service. I have 2 questions.

I received an absolute discharge in March 1996 clearing all of my debt (which included my student loans) and I've been debt free ever since. I was accepted into university for this Fall but I need to apply for a student loan. On the application it asks:

Have you ever declared bankruptcy?

1) If you had outstanding student loans at the time you declared bankruptcy, you must answer 'YES' to this question unless all of the following conditions apply:

You were discharged from bankruptcy involving student loans; and
You have applied for rehabilitation through the Canada Student Loans Program (CSLP); and
You have received clearance in writing from CSLP for rehabilitation of your eligibility through StudentAid BC.

If all three of these conditions apply, you may answer 'NO' to this question. Keep documentation of your clearance through CSLP.

2) If you did not have student loans at the time you declared bankruptcy, answer 'NO' to this question.

If you or your spouse are currently in an undischarged bankruptcy, you must have your trustee agree that any funds you may be eligible to receive are not seized to pay for debts involved in your bankruptcy.

For more information regarding the process of requesting rehabilitation of eligibility for StudentAid BC funding after bankruptcy, visit www.StudentAidBC.ca.

The conditions seem to be based on changes to the BIA after 1997. Is that correct? If that's the case what should I select yes or no?

The second question asks:

Have you ever cashed a Canada Student Loan? (if FULLY repaid, mark NO)

You may have received a Canada Student Loan from B.C. or from another province for post-secondary study.

If you have previously received and cashed a Canada Student Loan, mark 'YES'.
If you have never received and cashed a Canada Student Loan, mark 'NO'.
If fully repaid, mark 'NO'.

Would having received an absolute discharge mean that the loan was "technically" fully repaid? I'm guessing that 'yes' means that it's active and has yet to be fully repaid.

So if I answer 'NO' to the first question and 'NO' to the second question it's almost like I never had a bankruptcy and I repaid my loan. Is this the happy ending of a successful bankruptcy?

I don't want to screw up or delay this application by misinterpreting a couple of 'hot' questions. Thanks again for your advice.

Replies:

Posted By: administrator
Date Posted: 07/June/2013 at 9:45am

I don't think a bankruptcy would not count as repaid. I don't think it was re-paid, so you would have to answer appropriately. You could call the NSLSC to get their answer, but take notes and make a record of who you spoke to,what they said, and even better, escalate it to a supervisory for clear instructions.

If you are denied student loans, talk to your Financial Aid office at your institution. Once you have the student loans assessment they can help you determine if you qualify for the Institution managed bursaries etc... Most people dont realize that a student loans assessment is the first step in getting these bursaries.

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Administrator
Mark OMeara
Author of Let Go and Heal: Recovery from Emotional Pain
https://LaughSingWrite.com - http://bit.ly/heal2024

Posted By: MojoJojo
Date Posted: 07/June/2013 at 3:18pm

Thanks Mark. Can I clarify your answer and the steps you advised me to take?

1. In response to Q2: You said, "I don't think a bankruptcy would not count as repaid."

In that sentence it sounds like you're saying you agree, the loan was "fully re-paid," that is, meaning that the loan was 'taken care of' by the Crown, right?

But in the next sentence you say, "I don't think it was re-paid...."

So it's hard to determine whether it's a 'YES' or a 'NO' answer I guess?

Hence, your recommendation that I contact NSLSC?

In the case of my first question my confusion is that since my discharge was absolute in March '96 prior to the

"Amendments to the Bankruptcy and Insolvency Act (BIA) that took effect in September 1997 changed the status of student loan debts by making them non-dischargeable if a student filed for bankruptcy before ceasing full- or part-time studies or within two years after studies ended."

the 3 conditions

You were discharged from bankruptcy involving student loans; and
You have applied for rehabilitation through the Canada Student Loans Program (CSLP); and
You have received clearance in writing from CSLP for rehabilitation of your eligibility through StudentAid BC.

for answering 'NO' seem to be based on the Amendments that were made to the BIA after 1996. Applying for rehabilitation does't apply in my case so conditions 2 and 3 are moot, right? Even condition 1 also seems moot in my case since their definition of bankruptcy refers to bankruptcies that occurred after the above amendments in Sept '97. Seems like the answer is pointing to 'YES' but...

Hence, your recommendation that I contact NSLSC before submitting my application?

Thanks.

Posted By: administrator
Date Posted: 07/June/2013 at 5:10pm

Hi
I'm not an expert on this so I'm just offering an opinion... .... I am thinking that they are trying to determine if you repaid the loan. Perhaps they need to reword their questionnaire.

I can see where the confusion can arise in the wording. I'm suggesting that you contact the NSLSC because of the issue you are raising, to clarify what the question really means, and to protect yourself in the future. If they review your application and find the bankruptcy, and then claim you answered the questions wrong, they could retroactively claim that you lied on the application and rescind all your loan agreements etc... and charge you with fraud. You obviously don't want that to happen, so clarify this in advance... and get a record of what they say the official policy is. Might be best to be on the side of caution.

Last thing you'd want is to have your funding revoked half way through your school and having to repay all those loans because they claim you answered the form incorrectly according to THEIR interpretation at a later date.

BTW I am recommending that you contact a SENIOR CASE MANAGER at the NSLSC not a lower level minion who won't have a proper answer for you. There have been numerous cases of rules being created without full knowledge of the implication...

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Administrator
Mark OMeara
Author of Let Go and Heal: Recovery from Emotional Pain
https://LaughSingWrite.com - http://bit.ly/heal2024

Posted By: MojoJojo
Date Posted: 07/June/2013 at 7:38pm

I'll update this post on Monday with the results of my talk with the NSLSC. --cheers

Posted By: MojoJojo
Date Posted: 08/June/2013 at 1:42pm

I found some information in the StudentAidBC instruction guide that is significantly different than the instructions found on the application.

Question 21 Bankruptcy

1) If you had outstanding student loans at the time you declared bankruptcy, you must answer ‘YES’ to Question 21 unless any of the following conditions apply:

When you filed your Bankruptcy Related Event (BRE) it had already been seven years from your last period of studies end date (PSED) and since that time three years have elapsed;
Your BRE was filed while you were a full-time student. Since then, you have remained a full-time student over consecutive terms and have not switched fields of studies;
You have received clearance in writing from CSLP to have your bankruptcy restrictions removed for your eligibility for student loans through StudentAid BC;
CSLP has sent you a bankruptcy clearance letter.

If one of these conditions apply, you may answer “NO” to Question 21. Keep documentation of your clearance through CSLP.

2) If you did not have student loans at the time you declared bankruptcy, and are discharged from that bankruptcy, answer “NO” to Question 21.

• If you or your spouse are currently in an undischarged bankruptcy, you must have your trustee agree that any funds you may be eligible to receive are not seized to pay for debts involved in your bankruptcy.

Student loan borrowers who have undergone a BRE and who do not meet any of the criteria in #1 above, must pay their student loans in full before being eligible for more student loans.

Again, they appear to focus on the current BIA but the conditions here are quite different from the online application form. In any case it would seem that I would need to receive clearance in writing from CSLP to have my bankruptcy restrictions removed. I'll confirm this on Monday and post an update.

Question 22 cashed a canada student Loan

You may have received a Canada Student Loan from B.C. or another province.

If you have previously received and cashed a Canada Student Loan, mark ‘YES’.
If you have never received and cashed a Canada Student Loan, mark ‘NO’.
If you are unsure if you have cashed a Canada Student Loan, contact the National Student Loans Service Centre or your bank/credit union.

Notice the difference from the online instructions. Now there's nothing about marking 'NO' if it's been "fully repaid."

At least the StudentAideBC instruction guide here is clearer than the online help instructions.

Posted By: MojoJojo
Date Posted: 10/June/2013 at 9:55am

Well here's my Monday update as promised.

1. I contacted NSLSC and was told that there was no record on file for me. I explained the issue I was having regarding the student loan application and was then transferred to the CSLP for assistance. They had my file and apparently there was still an outstanding collection request from the bank that had originally handled my loan but who hadn't been properly notified of my absolute discharge in March 1996. I was put on hold for about 10 minutes and then was told that there had been an error at their end and that they would fix it and update my file, remove any restrictions, but I should wait a few business days before submitting my loan application. I agreed to contact the CSLP again next Monday to make sure that everything was processed, that I had a green light before submitting my loan application.

It seems as though some requirements have changed regarding the need to receive clearance in writing; that is, an actual letter from the CSLP. When you contact them to make the request they can update your file (just make sure it gets updated like I will do after 5 business days) which reflects whether you have any restrictions or not should your file ever need to be officially accessed in the future. After I confirm next Monday I will be able to confidently answer 'NO' to the Bankruptcy question. Whew!

Thanks for your support Mark and I hope my case can help others, too.

Posted By: administrator
Date Posted: 11/June/2013 at 8:17am

Thanks for posting what you've found. I'm sure it will help others!

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Administrator
Mark OMeara
Author of Let Go and Heal: Recovery from Emotional Pain
https://LaughSingWrite.com - http://bit.ly/heal2024