Student Loans and bankruptcy

Posted on Wednesday, February 20, 2008

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Now I just recently lost my job and now am not able to pay my debts. Unfortunately I am jsut at the point where I am going to have to start paying up my student loans(about 55,000 that is divided amoung the bank + government).

But the big problem is the job market, it is tight right now and I don`t think I will be able to find a job that will pay me what I need.

Here are my questions:
I know that government student loans are not cleared by a bankruptcy, but is this the same for my bank loans. Do the bankruptcy laws have any restrictions that would prevent me from leaving the country while I am in bankruptcy. Will the bankruptcy have any detrimental impact on my ability to obtain Canadian Citizenship?

Thanks!

Filed under: Student Loans and Bankruptcy
 posted by Questions @ 9:59 am
1 Expert Comment:

 At February 27, 2008 | 8:05 am , Barton Goth GCO Bankruptcy Trustees Said...

For a student loan to suvive a bankruptcy it must be done under the appropriate student financing legislation. Now most “Student Loans” are. However the loan that is extended is not under these statutes then they are simply unsecured loans and are dischargeable in a bankruptcy.

Now is where it gets tricky. Sometimes (although it is rare) the bank advertises a product towards students that makes it sound like it is a student loan, but really it is simpy an advertising program. The best example is a student line of credit. This is a product that we regularly run across that is often not done under the student financing statutes but simply is a regular line of credit that can be discharged if you were to file a bankruptcy.

Your next question was one of mobility. There is nothing to prevent you from migrating withing or even outside of Canada while you are in Bankruptcy. All you need to do is to let your trustee know what is happening and provide them with up to date contact information.

As for the citizenship question, you are best to contact a citizenship lawyer to ask this of as it is an area that I am not famiar with.

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