Question: I’m planning on doing a consumer proposal and planning on going back to school and would probably need to apply for a student loan. On top of this I have a 6-7 year old student loan with up to date payments on it. How do you assess this situation?
Thank You
Answer: A student loan is only automatically discharged in a consumer proposal or bankruptcy if it is more than seven years old at the time of filing. If yours is six years old, it would not be discharged. You are still able to apply for a new student loan, and in most cases you would be accepted even if you file a proposal.
In most cases a proposal is filed because the debtor has surplus income, which makes a bankruptcy in Ontario more expensive. If you return to school full time you would probably not have surplus income, so for you a bankruptcy would also be an option (assuming you have debts other than a six year old student loan).
As you can see there are a number of factors to consider, so your best option would be to consult a licensed Ontario bankruptcy trustee for a free initial consultation to review your specific situation.