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Should I repay my student loan?

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Alexandria18 View Drop Down
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Joined: 21/November/2017
Location: Toronto, ON
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    Posted: 21/November/2017 at 11:07am
Hello,

I have student loan debt opened in 2008 (both the federal and provincial portions) toward which I have not paid since 2012.

On my equifax statement it shows the federal portion under credit files and it shows the provincial portion under collection files. 

The last date of activity for the federal portion is september 2012 and for the provincial portion it is october 2012.

The provincial portion has been taken over by ARO inc and is reflected as a collection file as I stated.

I'm wondering what the outcome would be if the 6 year mark is hit (next year september/october) for both portions of this loan. 

If the ontario portion is in collections can i treat it like any other loan gone to collections and simply let it fall away after another year or so? And does this apply to the federal portion as well? 

I was looking to begin taking care of this debt once and for all but I just want to understand how the limitations apply with regard to my current situation. Thank you!
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jjunket View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote jjunket Quote  Post ReplyReply Direct Link To This Post Posted: 28/November/2017 at 10:48am
In Ontario, there is legislation that prevents the provincial portion of the student loan from dropping off of a credit report - pretty much forever.  This has been discussed in a couple of threads here.

Other provinces, I'm not as sure on the rules.

The collection might drop off after 6 years, but essentially as soon as anyone notices, or it bounces to a new agency, it runs the risk of being put back on.  If it does drop off, it's likely just an oversight.

For me, the best bet was to rehabilitate both sides of the loan (I did federal first, provincial second).  Apparently, after the rehabilitation of the provincial part is complete, the collection should be removed.  This remains to be seen - my loan goes back to NSLSC in early 2018, I will make an update somewhere on these boards after I find out.

Based on the reading I've done, it squares up like this:

Federal part - if ignored, may proceed to legal action
Provincial part - less likely to sue, but the credit consequences will last forever (in Ontario, at least)
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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: 29/November/2017 at 8:04am
Nova Scotia and Ontario are the only 2 wheres they are not bound by any limitations. Ontario loans that are VERY old and had been in default on or before Jan 1 1998, then there these Ontario loans may be bound by the prior law. 

A debt that is confirmed legally unrecoverable cannot be reported. Sometimes though the creditors have a difficult time distinguishing between "should not" and "cannot". The onus is up to the person who it is being reported on to make the argument though. 
The Canadian Financial Wellness Group (CFWG)



www.cfwgroup.ca
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