Archive for Category 'student loan', page 2

Question: Can a person negotiate a student loan debt that is in collections with Revenue Canada? I have heard both yes and no. I contacted CRA and was told absolutely not.

Answer: The answer is yes, you can negotiate anything.  However, in most cases the government will not make a deal on amounts owed, because if they make a deal with one person, they are afraid they will need to make a deal with everyone.  They may agree to waive some of the interest owing, but generally speaking they will not make a deal.

The only exception would be in the case of the filing of a consumer proposal, which is a legally binding settlement, created by federal law.  If the majority of your creditors accept the proposal, Revenue Canada must also accept it.  For further information, and to determine if a proposal would work in your case, contact a proposal administrator in your area.

Question: I have an old student debt (eighteen years old) that has been with a financial collection agency for most of that time. I have been paying small amounts for the whole time, (averaging 400.00 per year) but I would really like to get them off my back forever.

In that time the original debt of about $4100.00 has mounted to about $6500.00 because of interest.

I may have a fair amount of money coming to me in the near future, and would like to use a portion of it to offer the financial collection agency a consumer proposal amounting to the original debt of approx. $4100.00.

I suspect the collection agency would love to get me off their books, given that if I declared personal bankruptcy, they would get a lot less of it. What do you think my chances of having them accept a consumer proposal for the original debt amount? Could I possibly offer them less and have them agree?

Answer: Yes, it is very possible to have the collection agency accept a proposal.  You have two options.

First, once you have the money, phone them up and offer to give them $4,100 if they will write off the remainder of the amount owing.  This is called an informal proposal; you can do it yourself (just be sure to get their agreement to the deal in writing).

Your other option is to do a a consumer proposal through a trustee.  If they agree to the deal it becomes legally binding.  However, you cannot make a consumer proposal to just one creditor; the deal must be offered to all of your creditors.  Also, the amount they will be willing to accept in a consumer proposal will depend on your situation (what other assets do you have?; who do you owe money too? what do you earn each month?) so a consultation with a trustee is necessary to determine if a consumer proposal is the correct option in your situation.

Question: Will I still need to repay my student loans if I claim personal bankruptcy?

Answer: Student loans are automatically discharged in a bankruptcy if it has been more than ten years since you left school.  If they are less than ten years old, student loans are not automatically discharged.  You can read more about proposed changes to these rules on the student loan bankruptcy blog.

Question: It will be 7 years since I went bankrupt the first time. Unfortunately, I could not get rid of my OSAP as it had not been 10 years. In April it will now be ten years since I’ve been out of college. Can I somehow go back on my old backruptcy and declare my OSAP so I do not have to pay them. I am now at collection agency and they call constently and threaten to take my house and vehicles. I have been paying them for 5 years but they are not happy with the monthly payments and want to increase them by 500.00 mth. I cannot afford this!!! Any suggestions??

Answer:  You should consult a bankruptcy trustee or a bankruptcy lawyer.  It is possible to make an application to the bankruptcy court to have your student loans discharged, even if the bankruptcy is over (as long as your student loan is now ten years old).  Follow this link for an article about discharging student loans after bankruptcy .

Question: I know that I can’t file for bankruptcy until my student loan is 10 years old. I thought that this meant 10 years after I ceased to be a full-time student. A collection agent at SDC told me that it’s 10 years from that date on which my interest relief period ended. I’ve been struggling with this insurmountable debt since I graduated 10 years ago. Is my sentence up yet, or is the SCD agent correct? Is it 10 years from the date I ceased to be a student or 10 years from the end of my interest relief period?

Answer: You are correct, the SCD agent is wrong.  The ten year period begins at the end of the month that you cease to be a student.  More information on student loans and bankruptcy can be found on the student loan bankruptcy blog, or contact a bankruptcy trustee to help you decide if personal bankruptcy is the correct solution for you.

Question: I live in canada and i owe 20 000 for income taxes and a student loan which i don’t know how much it is now and bad credit cause i did not fufill the agrements each month. i need to do something fast to get this fix so i can reclaim my credit and name and i want to go to edmonton to work as a subcontractor for a drywall company that my friend offered me. for that i need 10 000 to get their a get settled.i hope theirs an answer for every question that i asked. thank you

Answer: If you have more debt than you can handle, you have a few choices.  We suggest you seek professional advice, either by contacting a credit counsellor or a bankruptcy trustee.  For debts to Revenue Canada, you will either need to make a repayment plan directly with them, or try a consumer proposal or personal bankruptcy. 

As for getting the money to move to a new city, if you have poor credit you will probably not qualify at a bank, and therefore will probably need to rely on family or friends for help, or see if your new employer can provide you with assistance to get you started.

Question: I went to college in 94-95 and OSAP has been after me ever since and now I am on disability and still cannot afford it. I was told there was a way to clear this debt off after 10 years if I cannot afford to pay it back, is this true?

Answer: Yes, there is a way to clear off the debt, assuming you can’t afford to repay it: personal bankruptcy.  A student loan is automatically discharged in a bankruptcy if you have been out of school for more than 10 years, which you have.

More information on student loans and bankruptcy can be found in our article on student loans and bankruptcy and at the student loan bankruptcy blog.  To file bankruptcy, you need to contact a bankruptcy trustee.