Student Loan Debt Relief Canada

Facts & Advice on Student Loan Debt Relief Options

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Student Loan Debt Relief Options in Canada:
Facts & Advice

As the cost of post-secondary education continues to increase each year, we have found more and more graduates being in a position where they are struggling to meet their basic living expenses while still paying down their student loans.  

With good paying jobs being scarce, it should come as no surprise that one of the biggest drivers of people seeking the services of a Licensed Insolvency Trustee, like Chande & Company Inc., are being largely driven by high levels of student debt.

What are your options in dealing with student debt?

If you are struggling to make ends meet there are options.  Below we have listed some options for you to consider:

1) Renegotiate your other high interest debts.  This may free up some additional cash for you to be able to repay your student loans.  The ability to qualify for a consolidation loan (for example) you will need steady employment, maybe a co-signer (such as a parent) and a strong credit score.

2) If the first option is not viable, then contact the National Student Loans Centre and find out if you can qualify for their Repayment Assistance Program.  This could result in a lower monthly payment. Just remember that the loan still remains in place and will need to be repaid in full. This may just extend the number of years that you have to repay the student loan.

3) If your student debt is just too high and is effecting your ability to cover your living expenses, you may want to seriously consider a more effective student debt relief solution.  There are two options. The first, a consumer proposal and the second, bankruptcy.

Both a consumer proposal and bankruptcy will get rid of your student debt.  With a consumer proposal, the student loan will be included with your other unsecured debts and you will pay a fraction of your total debt to a more reasonable manageable amount.  With a bankruptcy, the entire debt would be discharged (wiped out). To learn more about each option, please click on the respective option: consumer proposal and bankruptcy.

Special Treatment For Student Loan Debt

In order for a student loan to be a dischargeable debt, you need to have been out of school for more than 7 years.

What Is The 7-Year Rule?

In order for a government guaranteed student loan to be dischargeable (wiped out) under the Bankruptcy and Insolvency Act, the person needs to have been out of school for more than 7 years.  We strongly recommend that you contact the Student Loans Centre and ask them what your “end of study date” is on their system or records.  It is this date that the 7-year rule starts from.  The phone number for the Loans Centre is: 1-888-815-4514.

Non-government guaranteed student loans

If your student loans are private non-government guaranteed loans, then the 7-year rule does NOT apply, and the student can be discharged like any other unsecured debt.  If you do not know if this applies to you, call us and book a free no-obligation consultation and we can find out for you.

Financial Hardship (the 5-year rule)

If you have not been out of school for more than 7 years, there is still a chance that the student loan could be discharged.  If you have been out of school for more than 5 years and repaying the student loan will cause you undue financial hardship, you can apply to court to have the student debt discharged.

If you think this could apply to you, we recommend that you speak with our Licensed Insolvency Trustee so that they could explain in detail, the factors that the court looks for in determining if the hardship provision applies to your case. 

Student Loans less than 7 years old

If you have been out of school for less than 7 years and would not be eligible for the financial hardship provision you could still benefit from a consumer proposal or bankruptcy.  If you have other unsecured debts (such as credit cards, pay day loan, etc.), a proposal or bankruptcy would reduce or eliminate those debts thereby freeing up cash to repay your student loan debt.

Want to learn more about your options in dealing with student loan debt?  Contact us for a free no obligation consultation.

Over 12 Locations Across Southern Ontario to Serve You

With Chande, you can book a free consultation at one of our locations across the Greater Toronto Area, Hamilton and Southern Ontario.

Finding an office that’s closest to you is as easy as clicking the link below.


Book a free, no-obligation consultation with us today!

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