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Government funding for post secondary education has been reduced and in turn, student loan debt in Winnipeg has increased. With this increase in student loan debt, it is becoming progressively more difficult for students to make a living following graduation. With thousands of dollars of debt to pay off, many students are finding it difficult to move out on their own, or even get a car. So, what options students have for dealing with their student loans? Bankruptcy? Or, is there something else they can do in regards to their student loan debt?
Student Loans in Bankruptcy
Automatic discharge of student loans in bankruptcy in Winnipeg, Manitoba will happen only if the student loan debt is ten or more years old. Bankruptcy is a great option for people whose student loans are at least ten years old, and who want to get back on their feet as quickly as possible.
Individuals who have loans that are less than ten years old will need to look into the various bankruptcy alternatives.
Dealing with Less than Ten Years Old Student Loan Debt
If your student loan is less than ten years old, that means that you cannot opt for automatic discharge of your student loan in a bankruptcy, and that you need to consider alternatives, including following:
- Contacting student loan lenders and proposing a payment arrangement that better suits your current income.
- Filing a consumer proposal.
Consumer proposals allow the individual to pay back his/her debt over a prolonged period of time. People are likely to succeed with this option if their student loan debt is at least five years old, and the proposed pay back period is also five years. This way, the loan will be over 10 years old by the end of the process.
The House of Commons turned down a proposal in 2005 to change the Bankruptcy and Insolvency Act to lessen the discharge period for student loans in a bankruptcy from 10 to 2 years. It likely will not be discussed again until there is a change of government.
First Step: Research in Detail Your Options for Dealing with Student Loan Debt
If you live in Winnipeg, Manitoba and have substantial student loan debt from post-secondary education, please contact our Winnipeg bankruptcy office today and book for a consultation free of charge. Our licensed bankruptcy trustees will review your financial situation, explain where you stand with your options - figure out if a discharge of your student loans in a bankruptcy is a possibility, and help you come up with a solution that will best fit your needs.
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