Question: I am in my late 20’s and recently lost my job. I have significant OSAP and federal student loans and a credit card debt. I am currently receiving employment insurance, but I cannot afford living expenses let alone making payments on these debts. How would filing bankruptcy affect my EI? Also, will my student loans (most recently from 2004) be discharged? Thanks
Answer: Filing bankruptcy in Ontario does not affect your eligibility for employment insurance.
Student loans in bankruptcy in Canada are only automatically discharged if they are more than seven years old (ie. you have been out of school for more than seven years). Your student loans would therefore not be automatically discharged. If you file bankruptcy when your student loans are more than five years old it is possible, at the end of the bankruptcy, to apply to court to have the loans discharged, but there are no guarantees.
Since you are currently not working, you have no wages to garnishee, so in the short term your best course of action may simply be to use your EI cheque to pay your rent and other living expenses, and then deal with the rest of your debt when you return to work. You can get more information from a credit counsellor or a bankruptcy trustee.