The average cost of post-secondary education in Canada is enormous – over $80,000 when all is said and done. Student debt can be overwhelming. That leads many to ask about a consumer proposal and student debt. That’s why, as the founder of a leading Winnipeg debt help firm, I want to answer some questions about student debt and consumer proposals, as well as other questions relating to student debt.
Understanding a Consumer Proposal and Student Debt
What should you do if you have student debt that you don’t think you’ll ever be able to pay off? The answer, as with many things in life, is it depends. That of course begs the question, what does it depend upon?
The first question is what is the nature of the student debt. Is it a National Student Loan, a Provincial Student Loan or a student line of credit. If your student debt falls into one of the first two categories then that begs a second question…when did you complete your studies?
Student loans are not dischargeable in a consumer proposal or a bankruptcy if the consumer proposal or bankruptcy occurred before the debtor ceased to be a full- or part-time student. Additionally, if you were a full- or part-time student within seven years of declaring bankruptcy or making a consumer proposal, then the debt is also not dischargeable.
But that doesn’t mean you’re out of options.
How to Get Winnipeg Debt Help with Student Loans
If the debtor has acted in good faith regarding the student loan liabilities and will continue to experience financial difficulties to the extent that they will be unable to repay the student loan then you can apply to the court to have the student loan discharged if at least five years have passed since you have completed your studies.
This process will require a court application and proof that you are and will continue to be, unable to pay your indebtedness under the student loan.
Student Debt – Student Line of Credit
Another type of student debt is a student line of credit. If you have a student line of credit it is not governed by the same rules as outlined above.
If you owe a student line of credit it is the same type of debt as all your other unsecured debts and will fall into the same voting protocol as the rest of your debts.
Student Loans and Consumer Proposals: The Final Word
Now that you know the technicalities behind the student loan debts the next question is should they be included in a proposal filing. The answer to that question is they definitely should be.
If you have not been out of school for at least seven years, when the government files their student loan claim they become entitled to receive a dividend in the proposal. The student loan debt will not be fully paid through the proposal but they will at least get some payment out of the proposal which will help with the overall amount owing on account of the student loan debt.
Winnipeg Debt Help with Caplan Debt Solutions
To find out about student loan debt and how to deal with all of your debts, contact Caplan Debt Solutions. We would be happy to have a discussion with you to review your financial situation and help you find the best solution for your situation.
With over 25 years of experience helping people attain financial freedom, our team can help you overcome even the most seemingly insurmountable and unmanageable debt burdens.