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Tax credits for interest paid on s. loans

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faithandhope View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote faithandhope Quote  Post ReplyReply Direct Link To This Post Posted: 02/May/2005 at 1:03pm
Johnny  wrote:
"1) If you have a Canada Student Loan with a judgment anchored, you cannot claim the interest."

And that certainly is the case but I have wondered why?  The money is still being paid - either voluntarily or through tax set offs - but interest is being paid.
Are those people who find themselves with a judgement after defaulting not due the same consideration?
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BigFatherA View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote BigFatherA Quote  Post ReplyReply Direct Link To This Post Posted: 12/May/2005 at 4:26pm
Being in default and in collections is different from having a judgement against you. 

Judgements are done by courts after a claim has been filed against you and you lost your court case (or did not file a defense).  HRDC usually goes for a judgement to prevent the statute of limitations on your debt.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote manfred23 Quote  Post ReplyReply Direct Link To This Post Posted: 01/February/2006 at 9:50pm
Does anyone know why a loan in collections would not qualify for a claim on line 319 in your taxes?  It seems to me that a payment is a payment and that people in debt need all the tools available to help them get out of debt. 

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buff Quote  Post ReplyReply Direct Link To This Post Posted: 02/February/2006 at 6:50am

If your loan is in collection, you can (and should) claim the interest you paid. The original holder of the loan mails you a tax receipt, much like the ones you get for RRSP contributions. You keep a section of it and include the other part with your tax return. If you're not getting those tax receipts, get on the phone and ask for it. It's your right.

Buff

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ferren Quote  Post ReplyReply Direct Link To This Post Posted: 04/February/2006 at 11:41pm

You don't necessarily need an official tax receipt to claim the interest paid. A statement from the collections agency or a letter or anything that proves you made the payments could be used.

Generally if you wanted a rough idea how much interest you paid over a year you would take your starting balance - say January 01/05 and subtract your ending balance - Say Dec 31/05 - and that would be the reduction of principal. Then you would take the total amount you applied toward the loan in total over the year and subtract the amount paid to principal from that. The resultant figure should be your total interest payment (claim).

 

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Post Options Post Options   Thanks (0) Thanks(0)   Quote manfred23 Quote  Post ReplyReply Direct Link To This Post Posted: 09/February/2006 at 9:23pm

That's what I thought.  The tax guide doesn't request a specific form, just documentation that you paid that much interest.  The CA I talked to said that you can only claim payments on loans in good standing.  But the tax guide doesn't say anything about that and as far as I know the only thing preventing you from claiming the amount is if a judgement has been found against you. 

I don't find it odd that a CA would lie (after all, their client is the bank, not the debtor).  It was after some thought that I realized that they only wanted to open up communication with me so they could coerce me into applying for a third-party loan to pay off their portion of my CSL.  I pay them what I can and have increased my regular payments whenever I can, so I know I'm acting in good faith.  But if I can claim the interest on my loans, I can pay them off faster (admittedly only the government portion of the CSL but that is much better than nothing!).

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Post Options Post Options   Thanks (0) Thanks(0)   Quote faithandhope Quote  Post ReplyReply Direct Link To This Post Posted: 06/August/2006 at 9:19am
So from this discussion I understand that if you have a judgement against you (as I have) then you can not claim the interest - is tis correct? Most but not all of the money I have paid has come from withholding tax refunds.
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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: 07/August/2006 at 1:44pm

Yes, unfortunately this is correct.

Johnny

www.cfwgroup.ca

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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