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Absolution after Consumer Proposal

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    Posted: 20/February/2005 at 5:22pm

Does anybody know where in Toronto I can apply to have a judge absolve me of the survivable part of my Canada Student Loan after I completed a Consumer Proposal?  Here's the low-down:

- I graduated from my degree program in November 1990.

- Unable to find a steady job, I went back to school for a 4-month computer training course to upgrade my skills, and finished in May 1995.  This was only a certificate program sponsored by HRDC.  I didn't take out a new loan, but renewed my interest relief status because I was in school full-time. I was later unable to find regular employment, moving from contract to contract job.

- I married in 1999. I started a Consumer Proposal in February 2000. My husband and I have no shared debts.

- I completed my Consumer Proposal in August 2003. My trustee explained my CSL was survivable, but that I could have the remainder removed from my credit history by a judge as usury, because the 10 year rule had elapsed.

- My trustee left the company, and didn't leave details about her usury suggestion in my file, and nobody else in the company is interested in pursuing it on my behalf.

-In February 2004 HRDC contacted me to collect, claiming the 1995 interest relief date is the relevant one for the 10 year rule, not the 1990 graduation date.  Interest has resumed. I am unemployed, my husband is unemployed, and HRDC states that because my husband is making payments on HIS credit cards, he must also pay them for MY student loan.

Any leads would be very welcome.  THANKS!

 

trm
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Johnny View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 20/February/2005 at 6:36pm

 

 

You wrote:

 "- I completed my Consumer Proposal in August 2003. My trustee explained my CSL was survivable, but that I could have the remainder removed from my credit history by a judge as usury, because the 10 year rule had elapsed."

 You know what really freaks me out about this? The fact that a bankruptcy trustee has told you this garbage! WOW! Your trustee just explained that your CSL residue will survive the proceedings - and you could have the remainder removed from your credit history. That is so false. The bankruptcy trustee is simply trying to give you some "inspiring" news just to cover up all of the misery you had sustained over this ordeal. Go back to your trustee who told you this pulpy fiction and get them to put it in writing. Guaranteed you will not get a letter outlining that stuff.

 You see the bankruptcy trustee's main objective was to hook you in to file a consumer proposal. That is their gravy. They earn the insanely high proposal fee (Usually 2K or so) PLUS 20% of whatever you pay into the proposal. That is outrageous. 

If they are not willing to help you, then you should refer them to the BIA that states the rules regarding their duties and responsibilities. They know that you do not likely know this stuff, you see.  

 The bankruptcy trustee that you went through will know how to motion a section 178. They are simply trying to pass you off and not get involved because they know how bloody difficult it is even to get a word in edge-wise in the hearing.

 Johnny  

Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote blah Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 9:25am
Since when is the interest relief date rather than the graduation date used to calculate the ten year rule. Where in the BIA is this stated? Johnny, do you have any idea about this?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote momof2 Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 11:24am

blah

going back to school reset the clock, not the IR app.

professionals built the titanic but amateurs built the ark...
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Post Options Post Options   Thanks (0) Thanks(0)   Quote blah Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 12:17pm
"In February 2004 HRDC contacted me to collect, claiming the 1995 interest relief date is the relevant one for the 10 year rule, not the 1990 graduation date."

But what about this HRDC claim?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote polyhymnia61 Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 3:59pm

He did the training program in 1995 though, blah. A course is a course, of course, of course...

Since he renewed his interest relief status because he was a student again, he reset the clock.

Still awaiting that person who has had their loans discharged since the ten year rule came in...and waiting...and waiting...

And I have a strange feeling that, even if it was cut to five years, we'll still be waiting a looooong time...just a feeling I have...

Poly

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Post Options Post Options   Thanks (0) Thanks(0)   Quote blah Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 9:25pm
I understand that part. But the post states that HRDC claims the INTEREST RELIEF date is the RELEVANT ONE for the TEN-YEAR-RULE. This is absolutely contrary to the BIA. Either the OP is mistaken, or HRDC is ignoring the BIA and making up new rules, which would never fly in court.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 10:08pm

 

 Blah,

 The 10 year limitation period starts from the day you ceased to become a student. Some have said that it is the last day of the month when you had ceased to be a student (full or part-time).

 The BIA states that it is 10 years from the day a bankrupt ceases to be a full or part-time student.

 When a person is in receipt of interst relief, they are obviously no longer a student. Otherwise, it would be a Schedule 2 in force which is considered "interest free". Interest relief means that studies have ceased. If you were told that the IR date is what comes into effect, then you might want to talk with Eshelton and ask him how accurate their informative representatives are.

 Eshelton, care to explain to Blah what I am getting at here?

 Blah, it is 10 years from when you ceased to become a full or part time student.

 Johnny

Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

solvestudentdebt.com
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eshelton Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 10:36pm

HRDC is making up new rules, and they blatantly contradict each other. 

Example:

Acting on the advice of a lawyer, I called HRDC Collections and asked them if there was any way of updating my credit report to show my payments to them.  I asked them what they wanted to see and what I had to do to make us both happy.

They suggested the Letter of Good Standing (I'll abbreviate LGS for short).  Since my question was in regards to repairing my credit rating, I assumed this LGS was going to be sent directly to the credit bureau. 

Then I call back and it is NOT sent the credit bureau.  The terms are I make 6 consecutive payments, and after 3 cheques cashed (and 3 post-dated), they send the LGS directly to me. 

When John and I called today, the rules have now changed.  It must be 6 consecutive payments cashed (no post-dates).  They also have a new rule that people on conference calls (3-way calls) must have power of attourney.  Fortunately in our case, they did not ask for this. 

Now the system is broken down and they cannot verify the 3 post-dated cheques on file.  So I call back in the afternoon and they say it is back up.  Fifteen minutes LATER, I receive a call from HRDC saying their system is pretty much shot for the day and won't be up for at least 24 hours.  I guess they didn't count on me calling in to verify when the system was back up.

And here's the icing on the cake - the LGS says my account is in good standing, yet they will not return it to the original lender (NSLSC), nor update the credit bureau.  So my account apparently is in good standing, or "not in a deliquent status" but is still deliquent according to the credit bureau.  This is contradictory, and ILLEGAL.  The LGS is nothing.  Meaningless.  They try to say it helps people with their credit, but cannot substantiate these claims. 

So you see, HRDC makes up their own rules.  And yes, their CSR's are very informative, but for all the wrong reasons, sometimes to their benefit, sometimes to yours.  Just make sure to catch them on it.  John and I did.

"A proof is a proof. What kind of a proof? It's a proof. A proof is a proof. And when you have a good proof, it's because it's proven." - Jean Chretien
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 21/February/2005 at 10:55pm

 

 "A proof is a proof. What kind of a proof? It's a proof. A proof is a proof. And when you have a good proof, it's because it's proven."

 

Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

solvestudentdebt.com
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Post Options Post Options   Thanks (0) Thanks(0)   Quote blah Quote  Post ReplyReply Direct Link To This Post Posted: 22/February/2005 at 6:41am
What a horror show. Itís actually kind of embarrassing that this is our government we are discussing here. How many other government-run programs are being administrated as shoddily as this one? Shall we consider the CSL program to be a representative microcosm of our government as a whole?

Eshelton, Iím truly sorry that youíve been given the runaround treatment. It frustrates me just reading your post. I can only imagine how you must feel actually living it.

Johnny, I havenít ever been told that the IR date is the relevant one with respect to the 10-year rule. Itís quite clear in the BIA that it is the date that one has ceased to be a student that matters.

I guess I just panicked when I read Terrymís original post stating that HRDC contacted her for collection purposes and stated that the IR date is what is relevant. It made me wonder if another midnight session had taken place in parliament.

Either way, I hope I can get through all this without ever having to take that plunge.

Thanks for the replies.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote blah Quote  Post ReplyReply Direct Link To This Post Posted: 22/February/2005 at 6:46am
Originally posted by Johnny Johnny wrote:


†"A proof is a proof. What kind of a proof? It's a proof. A proof is a proof. And when you have a good proof, it's because it's proven."




I understand what you're saying, but can you prove it?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 22/February/2005 at 8:18am

 

 Yes.

Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote eshelton Quote  Post ReplyReply Direct Link To This Post Posted: 22/February/2005 at 8:27am

blah,

I'm not very upset about this whole thing - actually, knowing that I have HRDC and NSLSC cornered by their own stupidity is a great feeling.  The phone calls are recorded, the documentation is there.  It is proven. 

"A proof is a proof. What kind of a proof? It's a proof. A proof is a proof. And when you have a good proof, it's because it's proven." - Jean Chretien
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Blue. Quote  Post ReplyReply Direct Link To This Post Posted: 22/February/2005 at 8:58am

But what's the next step, eshelton? I'm not trying to be derogatory at all, but where do you go once you know that the GOVERNMENT is lying? I mean, if anyone actually gave a sh*t, none of us would be in this predicament to begin with.

I got hope from your earlier post about being able to get an LGS. But as you say, if it's utterly useless, then what difference does it make if we repay our loans? If the govt isn't willing to work with us, and help US, especially after we work our asses off to bring our loans back into good standing, then why bother?

Sorry, feeling a little bummed today about this whole financial penitentiary.

What you are obsessing about is a debt. It's a loan. It's business. It's money. It contains no moral baggage. You are a decent, kind, loving and moral human being.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eshelton Quote  Post ReplyReply Direct Link To This Post Posted: 22/February/2005 at 9:06am

You present this evidence to the MEDIA.  What they are doing is illegal and it is proven, the media will eat this for breakfast.  There are still some calls to make before going to the media, just to make sure there is no escape route for them.  Their own policies have painted themselves into a corner. 

I haven't received the letter yet, apprently their system is down until Wednesday, riiiiiight. We already have them on tape spelling out the whole process, so getting the letter isn't critical, but nice to have. 

Why be in good standing if the LGS is useless?  I've been asking that question for a while.  I am nearing paying one of my 4 loans in full, that will be reflected on the credit report.  So that's my incentive. 

"A proof is a proof. What kind of a proof? It's a proof. A proof is a proof. And when you have a good proof, it's because it's proven." - Jean Chretien
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Post Options Post Options   Thanks (0) Thanks(0)   Quote peewee Quote  Post ReplyReply Direct Link To This Post Posted: 23/February/2005 at 8:11pm

So Johnny,

the way i read the BIA, a person ceases to be a "student" the day they file a proposal or bankruptcy etc.  So, what if i actually was a full time student the day i filed bankruptcy and the day after that, and the day after that......

i filed in march 2003 and i have  been a full time student ever since and 2 years before in fact.  so now, does my 10 year clock start the day i ceased to be a full time student (i.e. the day i filed  bankruptcy) or hasn't it started yet since i am still a student?

according to the rules, it seems that i am only a student when it is convenient for them to say that i am. 

what do you think?

peewee

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 23/February/2005 at 9:41pm

 

 Peewee,

 I can't imagine why ypou would think that a bankruptcy assignment would be considered your last day of study.

 The BIA stipulates that student loans are exempt from bankruptcy proceedings for a period of 10 years from the day the individual has ceased to be a full or part-time student.

 That is pretty self-explanatory. But then again, the government has this amazing ability to change the rules whenever they feel like it.

 My suggestion is to go by what section 178 says.

 Johnny

 

 

Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote peewee Quote  Post ReplyReply Direct Link To This Post Posted: 24/February/2005 at 6:22am

Johnny,

sorry, i'm getting my information from the canada student loan regulations which are in effect the rules/details used to implement the canada student loans act.  I provided the link below as well as excerpts from the act.  it clearly states that:

I ceased to become a full-time student on the day my interest-free period was terminated which is the day the i filed my bankruptcy. at least that is my interpretation.  but hey i could be wrong...i'm only a girl!!!

also, i was aware when i filed that my student loans would not be dissolved as part of my bankruptcy!!!  I did not even list them in my bankruptcy as part of my debt!!!!  i was in interest free status at the time so my SL debt was not even a factor in my financial situation.  however,at the time, i was not aware of the canada student loan regulations.  i had only researched the CSL act and the BIA before i filed.  it's been a while, but i believe that your interpretation is the same one i had when i filed bankruptcy - i.e. i was a student as long as i was in school.

so, even though my loans were in good standing at RBC, exactly one week after i filed, RBC sent me a letter to tell me that my loans automatically went into default as i was no longer considered a full time student and was therefore no longer eligible for interest free status.  they did not care that i still was, in fact, a full time student !!!!!

had i filed bankruptcy after June 2004, i would not have lost my interest free status because these rules were amended as part of the belated 2003 federal budget which was tabled on feb 18, 2003 (i believe). 

and just to clear things up, i am informed, i do my own research and i never set out to rip anybody off here.  my financial situation at the time was independent of my student loans.  i was well aware, when i took out my last SL in sept. 1998 that the rules had changed. 

Johnny, since you seem to have an answer for everything, i thought you might have an answer for me.  the CSLR information has been pasted below.  if you have the time, i would really appreciate your interpretation.

http://laws.justice.gc.ca/en/S-23/SOR-93-392/55947.html#rid- 55987

CEASING TO BE A FULL-TIME STUDENT

 

4.1 Subject to paragraph 3(2)(b), a borrower ceases to be a full-time student on the earliest of:

Ö

(c) the day on which the borrower's interest-free period is terminated in accordance with subsection 9(4). SOR/95-331, s. 2; SOR/96-369, s. 3; SOR/2004-121, s. 2.

9 (4) Subject to subsection (8), when the outstanding balance of the principal amount of a guaranteed student loan and any accrued interest become payable under any of paragraphs (1)(c) to (k), the Minister shall, effective on the day referred to in that paragraph, terminate an interest-free period in respect of all of the borrower's outstanding full-time guaranteed loans.

9. (1) Subject to subsection (8), the outstanding principal and any accrued interest in respect of a guaranteed student loan become payable

 (c) where the borrower makes an assignment under the Bankruptcy and Insolvency Act that is filed and not cancelled, is deemed under that Act to have made an assignment, or is the subject of a receiving order, on the earlier of the day on which a receiving order is made or the assignment is filed with the official receiver;

 

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Post Options Post Options   Thanks (0) Thanks(0)   Quote valerie Quote  Post ReplyReply Direct Link To This Post Posted: 31/March/2005 at 5:53pm
I keep seeing messages about the 10 year rule after you graduate.  My problem is, that after getting 40K in debt I had to leave University without graduating.   Does this mean that I never will reach the 10 year rule?  I too cannot pay my full debt load (now at 60K+) and I was hoping in 3 years I could declare bankruptsy.
Hope may come at the 10 year mark...maybe
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