Student Loan!!

Large portion of my proposal was due to my student loan.

What will happen at the end of the proposal with my student loan considering that it would be 10 years passed from my graduation?

I have heard that soon the law in this regard would change to 7 years? is that true? and if it is, then what should I do in order to get rid of this student loan?

Thanks a mil.

Answer: The answer depends on your proposal. Under rules in effect now (spring 2008) a student loan is only automatically discharged in a bankruptcy or consumer proposal if you have been out of school for ten years when you file the proposal, unless the student loan creditor specifically votes in favour of the proposal. You should contact your trustee (the proposal administrator) to ask how the student loans people voted.

If they did not vote in favour, it is possible that they will pursue you for the loan once the proposal is completed. You may then need to go to bankruptcy court and ask the bankruptcy judge to discharge your student loan (which he may or may not do).

New student loan rules have been proposed, which will lower the waiting period from 10 years to 7 years; those rules are expected to come into force later in 2008. Full details on student loans and proposals and bankruptcy can be found on the student loan bankruptcy Canada web site.

Labels: student loans