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Absolution after Consumer Proposal

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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 31/March/2005 at 6:25pm
first,
its 10 years after you cease to be a student. graduation is not required...

you are correct to note that rules kick in if you declare bankruptcy and still in school.. yes your loans are automatically defaulted if you declare bankruptcy even though they are not discharged. The liberal government changed the bankruptcy rule to 10 years without looking at the other regulations in place.... stupid as far as I believe...


also, be careful which laws you look at
there is the student loan act, and the student financial assistance act... depending when you took out your loans, different acts and rules apply...


http://laws.justice.gc.ca/en/S-22.7/SOR-95-329/index.html

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Post Options Post Options   Thanks (0) Thanks(0)   Quote nago Quote  Post ReplyReply Direct Link To This Post Posted: 05/June/2005 at 4:03pm
you can claim bankruptcy but you would have to prove that you will NEVER ever make any money to have them discharged


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Post Options Post Options   Thanks (0) Thanks(0)   Quote dizoe Quote  Post ReplyReply Direct Link To This Post Posted: 06/February/2007 at 8:15pm

Here's another question about the 10-year rule.  I graduated 10 years ago and am contemplating bankruptcy.  I'm worried because I took 3 part-time courses at a post-secondary instituion in BC in 2006 - one course a semester at night for personal interest.  I was working full-time at the time.  I also need to take a 4-week job related course next month at a private language school - I have been laid off and will be studying to upgade a certificate that I need to get back to work.  Have/will these courses reset the 10-year clock?!  Is there anyway for me to avoid these courses appearing in someone's records...I feel sick that I might have caused myself to go back to the beginning.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 06/February/2007 at 9:30pm
There have been some cases in Quebec where it has been ruled that the clock was not reset, but from what I've heard it does reset the clock....

Trying to keep it out of the records would not be advisable because it would amount to making a false statement...
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 08/February/2007 at 4:06pm
The law says " ... ten years from the day the bankrupt cesed to be a full or part-time student". Th interpretations that are being thrown around are many. However, if you read it, there is only one way to interpret it, and the loan providers (and their legal advisors) cash in on the blunders of the law makers who were obviously not "all with it" when they sat down and wrote this stuff.

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 Canadianlioness Quote  Post ReplyReply Direct Link To This Post Posted: 05/July/2007 at 6:50pm
OMG...I feel so overwhelmed looking at the various situations here.  I too am in 60K+ debt from CSL and OSL combined.  When I ceased being a student for personal reasons, I called the then NSC and CIBC and the student financial centre at York U inquiring about the loan forgiviness and interest relief programs. This was back in May of 2000.  I was told that no such program existed.  Then only 5 months later was told that I could have signed up for interest relief, but was too late.  I told them that I was told by their CSR that the program was obsolete.  They told me that it was still running and I had time then, but too late now.  Damn these shdy people!!!  Gone thru hell with collectors.  Trying to find ways of eliminating these two debts.  Single parent on minimal income. It's just damn too much.  As I was told by a nasty collections agent, start saving up my pennies because I going to pay this debt regardless of my situation.  Just disgusting.  I've been told if I go to a debt counselling program, collection agencies could refuse the proposal at any time.  simply sick!!!
I look for deliverance from this student loan!!!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 06/July/2007 at 4:33am
Non-profit debt poolers tend to avoid undertaking cases involving student debt. This is because the student finance system does not pay commission to debt poolers. If there is a lot of consumption debt and student loans, the debt pooler will get paid their commission from the creditors though and not from the student loan providers.
 
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 Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 19/December/2009 at 9:23pm
I don't know why the study end date is so difficult for everyone to understand.

S. 178 1.1 states that limitation period starts when the debtor ceases to be a full or part time student.  Graduation is not an issue.  You cease to be a student when you cease to be a student.

Next, you don't have to be out of school 10 years ONLY 7 years.  
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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 20/December/2009 at 9:50am
Iknowalot,
I think you have more insight into this situation than most of us here.  We have all been under the impression that if you go back to school, the clock is reset.  Is that the case? Or have court cases shown otherwise?   And of course, the government and collection agencies will try to bluff and continue to collect unless we are knowledgeable...
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Post Options Post Options   Thanks (1) Thanks(1)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 20/December/2009 at 1:34pm
There are many forms of student loans but can be broken down into 2 categories. Category One: those student loans granted under the Canada Student Loan Act, Student Financial Assistance Act and the enactment of any province for the granting and guaranteeing of student loans.  These are Canada Student Loans, Provincial Student Loans and non guaranteed federal loans (risk loans). Category Two: all other student loans or student lines of credit.

Category One loans are only subject to discharge if bankruptcy / proposal was started after the expiration of the appropriate s. 178.1(g) limitation period which could be 1, 2, 10 or 7 years.  In the event the limitation period had not expired at the date of bankruptcy / proposal, the student loan debts are revived upon the discharge of the trustee (not the discharge of the bankrupt / consumer debtor.  Pursuant to s. 178 1(h), the interest on the loan continues and is not interrupted by the bankruptcy / proposal.  In order to deal with the need for the bankrupts fresh start, s. 178 1.1 provided that a student loan that was not discharged by the bankruptcy / proposal could be dealt with as a hardship after the expiration of the 1, 2, 10 and now 5 year period.

Category Two student loans are not subject to s, 178.1(g) and are subject to discharge if not opposed by the creditor in the same manner as an ordinary debt.  Personal loans for education and student lines of credit (often cosigned) are subject to discharge.

A Category Two Student loan (in addition to EI funded schooling, personal funding, bursaries, etc.) cannot be used to restart or extend a limitation period for a Category One student loan with one exception being the extension of the end of study under the terms of the student loan legislation. If you get government student loans for years one and two of a four year program and pay for years three and four from non student loans and the repayment of the government loans are suspended until the completion of year four, the end of study will be at the end of the fourth year.

"L" went to school taking ECE ending in 1989 funded by government student loans.  She ended a social work course some 10 years later funded by her First Nation Band.  She declared bankrutcy in 2000.  She alleged that she had been out of school with respect to the government student loans for the requisite 10 years and they were subject to discharge.  HRSDC argued that the schooling funded by the First Nation restarted the 10 year period and she should not have the loans subject to discharge until 10 years from the end of the later schooling.  The Court held that Category One loans were independent of all other debt that was subject to discharge and that the 10 year limitation period relates to that education only.  Category Two loans do not affect category One loans and the limitation periods related to them.

This makes absolute sense.  Education is an asset.  If the asset is funded by a student loan,  the party (government) should have a right to determine if the asset they helped create has value before such loan should be subject to discharge in an insolvency proceeding.  This period went from 2 to 10 to 7 years.  In the event, that the student loans were used for their intended purpose; that student went to school; that no substantial economic benefit was derived from the education; that efforts were made to pay and efforts such as interest relief / loan forgiveness were used to otherwise reduce the student loan debt, the student loans could become subject to discharge after the eventual expiration of a 2 to 10 to 5 year limitation period from the end of study relating to the Category One student loans.   
 
This also makes sense because s. 178 1(g) and 178 1.1 relate only to government funded or guaranteed student loans.  

There was a case I recall where a Sask. Credit Union funded education for an employee.  The employee graduated and left the company.  The former employee declared bankruptcy.  The CU attempted to prove that the student loans should not be subject to discharge.  Their action failed.
It should be noted that a non government student loan creditor my oppose the discharge of the bankrupt on grounds set out in s. 173 just as any other creditor.  A hearing will be held and the Court will determine if the discharge should be granted, suspended or if a conditional order should be made.  In the event of a conditional order, the funds paid to the estate are for the benefit of all of the unsecured creditors not just the non government student loan.

The was a case in NS.  A teacher had two study periods.  Study Period One was funded by federal and NS student  loans.  Study Period Two was funded by federal and Ontario student loans.  The bankrupt made an assignment into bankruptcy prior to the end of the 10 year period.  He made a s. 178 1.1 hearing after the 10 year period had expired for the Fed / NS. loans but before 10 year period expired for the Fed / ON student loan period had.  At the hearing, the Court ordered that the burden had been met with respect to hardship and that the Fed /NS were subject to discharge. The hearing was adjourned for a period when the Fed / ON loans would be eleigible.  The Court ordered that the matter would be heard again when the Fed / ON were 10 years from the end of study date.  Govt Student loans in one regime do not affect govt student loans in another regime.

The biggest culprits of bad information are CA and banks.  If it is the govt, they are just not informed.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 20/December/2009 at 1:52pm
Re: paragrah six of recent post regarding education as an asset.

This paragraph relates to a post bankruptcy hardship application for relief after 2 to 10 to 5 years and not the bankruptcy itself.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 20/December/2009 at 2:24pm
It is all about interpretation. There are some that say when a person ceases studies - period; and there are others that say it only applies to being a student while on the government's dime. The regaulations that restrict student loans from bankruptcy does actually seem to be a violation of one's rights. If you owe tax debt there is less restirction to access.
 
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solvestudentdebt.com
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 20/December/2009 at 5:20pm
Johnny:
Its not about what I think.  Its about the case law and the decisions that have been made by some high ranking registrars and judges.  I am only repeating their decisions,  If you want the cases, I can provide them.

To many on this forum, the calculation of an end of study date is very important.  There would be no benefit for me to post false hope.  So I have carefully researched case after case, application after application and find what I have posted to be accurate.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 21/December/2009 at 6:26am
Then you should present your research and findingds to the superintendant's office so theyt do not mislead people. I am not saying what you are posting is wrong. However, people will go to sources like the Supie and take what they say as being true and accurate.
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 Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 21/December/2009 at 1:26pm
I will.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Johnny Quote  Post ReplyReply Direct Link To This Post Posted: 21/December/2009 at 7:44pm

It puzzles me how the SOBIA's office is so misinformed. Doesn't this seem peculiar?

 
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 Iknowalotofstuff Quote  Post ReplyReply Direct Link To This Post Posted: 21/December/2009 at 8:45pm
I look at OSB in a different light.  They are responsible for the administration of the Act not the interpretation of it.  The OSB should not be giving out legal advise.  If you contact a court office, they provide you with legal information not legal advise.  If you contact the OSB, they should not provide legal advise only information.  If they were to provide advise, they would need to keep track of all of the decisions made in the various bankruptcy courts.  Obviously, they do not do this.  

It would be simple to do if they wanted.  There would be a requirement that they be served with a copy of every motion, opposition and application made in the various courts and require a copy of the decision.  They do not do this very often.  Some of the more prominent cases appear in the OSB case law bulletin.

I listed some cases in a post earlier this evening.  I would bet that the OSB has never heard of these cases.  I would bet many bankruptcy lawyers have not heard of the cases.  I would be willing to bet a large number of trustees have not heard of them.  I hear of them because I spend research time looking for them for the purpose of informing clients and others who want to know.

If you call the OSB in London, ON, they will tell you to contact a lawyer or read the act.  No interpretation.  They might read the Act to you.  You can get more information out of Holden & Morowitz Annotated Bankruptcy and Insolvency Act than from the OSB.   The Official Receivers are not lawyers.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote lola36 Quote  Post ReplyReply Direct Link To This Post Posted: 21/July/2011 at 11:24am

I have a similar story.  My records did indicate the 10 year mark for being absolved of my student loans.  The problem was when I went to the trustee's office they said my consumer proposal had actually reset my loans again.   In other words instead of being finished in 1995 my loans were reset back to 1998.   I told them that couldn't have been possible.  I already payed a huge amount of money each month.   I spoke to a lawyer and he said the same thing.   In the end I had to pay the remainder amounts on both student loans owed.   It actually put me into more debt.  I had to settle out one loan thanks to my husband's help.  The other loan I have virtually payed off now.  The consumer proposal actually put into more debt.  I have payed well over 39,000 and now I can see the end of the rainbow.  I owe less than 5,000.   It will be payed off in the next 7 to 8 months. I will never get another student loan from the government in my life.  You are better off going to the RBC and getting a student loan than getting government student loans.  This way you can actually pay it off and take part-time classes.  I learned from this experience you are better off getting a job and taking classes online and paying for them yourself.  I have one credit card and refuse to give anymore of my hard earned money to the government.  Shocked

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