How will my student loan be affected?

A bankruptcy can help with student loan debts if you have been out of school for seven years or more.

  • If you have been out of school for 7 or more years student loans are treated like regular unsecured debts.
  • Students, who are experiencing financial problems, and have only been out of school for 5 years (but less than 7 ) may apply to the Court to request their student loans be discharged along with the rest of their debts.


For answers to more questions like this, please visit our FAQ page.

How Long does Bankruptcy Last?

calendarA first time bankrupt, without surplus income, would be eligible to be discharged from bankruptcy nine months plus a day from the start of the bankruptcy.

A second time bankrupt, without surplus income, would be eligible to be discharged from bankruptcy twenty-four months plus a day from the start of the bankruptcy.

An Insolvency Trustee can sit with you to discuss your situation and explain how surplus income could change these timelines.


For more answers to questions like this, please visit our FAQ page.

Why am I in Debt?

What caused my debt problem?   We all know that debt can sneak up on us.  Debt can consume our most valuable assets, cause mental anguish & stress and in many cases, damage our relationships.

Canadian Debt

Why are we in Debt?

Have you ever thought of why you are in debt?

There are many factors that push individuals into debt and this is because most are not even aware of the real causes behind it.   We all see the marketing messages that can eliminate your debt, fix your problems, and without a doubt, there are ways to correct your financial situation…however, one should also be aware of the CAUSES that can lead to your financial decline.   If we see the warning signs, there may be ways to avoid being consumed by debt.

Some of the major turning points of falling into Debt traps are:

  1. Divorce: Around 40% of Canadian marriages end up in divorce and with it comes strain on personal finances. The laws in Canada govern what should be done with a couple’s money during a divorce settlement. When one party demands too much, the other will be forced to go into debt to pay for attorneys as well as what their partner deems necessary as part of the settlement.
  2. Poor Money Management: Most of the time, poor budgeting results in debt in some way shape or form.  Without a budget, you will not be able to track expenses. If you write down your spending for an entire month you can see exactly where your money ends up.
  3. Reduced Income: Often expenditure outweighs income. If you do not budget for a lower income in handling your life, then it is virtually inevitable that you start to take on debt. Make sure that you understand your changing circumstances and reduced income and create a budget and plan as soon as possible.
  4. Gambling: Is one of the most addictive and loved forms of entertainment for Canadians. However, it is merely a guaranteed exchange of money from you to the gambling establishment.  Gambling can easily lead you into major debt and mortgaging your future to the gambling establishment in an effort to try to win back what you have lost.
  5. unemployment: Individuals that are unemployed for a long time will inevitably fall into the hands of owing on mortgages, loans, etc, and without work, it will consume your assets.
  6. Medical Expenses: Lapsed policies and expensive medical treatments make this one of the easiest ways to fall into debt. Most medicines cost money and usually a lot of it. When you don’t have the money to pay for prescriptions it can be easy to put the bill on a credit card or even to take a loan out to ensure you get the necessary prescribed medicines that keep you alive.
  7. Savings: If you want to avoid debt, try to be prepared for unexpected expenditures by putting some money aside. If you have decent savings in place you can use it for emergencies like severe illness, a job-loss or divorce without increasing your debt.

The above mentioned causes of debt are very common for Canadians and can be easy to fall into. However, if you develop good money management and budgeting skills, you can help to avoid them.