Hello,
I have a few student loans and therefor my questions relate to the proposed changes to the Bankruptcy. Is that change already in force?
If so, what are the financial condition to be met for applying for student loans to be released after the 5 years, I think this is referred to as hardship? Does this has to be done through Court and if so is there any form or template that I can download to do so?
At April 28, 2009 |
5:58 am
, Barton Goth, Trustee in Bankruptcy Said...
Firstly the changes to the way student loans are treated in a bankruptcy were enacted on July 7, 2008. What this does is it reduces the standard time frame that must expire for student loans to be released by bankruptcy from 10 years to 7 years.
There is also a hardship provision that stipulates the court can order student loans that are less than the required 7 but more than five years if hardship can be demonstrated. So yes, this has to be done through court. There is no template to do so and my recommendation is to contact a lawyer familiar with the Bankruptcy and Insolvency Act as demonstrating hardship is not as easy as you may think. There are several thing that must be evidenced, including good faith, severe hardship, and you must demonstrate to the court that you didn’t benefit from the education obtained.
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