What Constitutes Hardship with a Student Loan after Bankruptcy in Canada?
Great article about bankruptcy. There are a few things you must know before you make that very difficult decision. Firstly, the sooner you act the more options you will have. Secondly, you may not have to declare bankruptcy you do have options.
Under the new student loan and bankruptcy in Canada rules implemented in July, 2008, a student loan is automatically discharged if you have ceased to be a student for more than seven years when you file bankruptcy. In addition, if more than five years have elapsed between the time you ceased to be a student and you go bankrupt, you may make an application to bankruptcy court to have your student loans forgiven. It will be up to the bankruptcy court to decide whether or not they forgive your loans, either in full or in part. To obtain forgiveness, you must demonstrate “hardship”. There is no clear definition for what constitutes hardship; each bankruptcy court across Canada may use a slightly different definition. However, in general, hardship is a simple concept: having to continue to pay your student loans after bankruptcy would be a financial hardship for you. For example, if you were forced to leave school early without graduating, perhaps due to a medical problem, and you are now w
