Student Loans and Bankruptcy

You’ve finished school, but are having trouble finding work in your field. You don’t want to fall behind on your student loan payments, but it’s hard to keep up with them when cash is limited and you have other bills to pay.

You might be wondering how bankruptcy can affect your student loan payments. Here are some important facts for you to consider about student loans and the bankruptcy process:

  • Unlike other unsecured debts, filing for bankruptcy will not eliminate your student loan payments, unless you have been out of school for at least seven years.
  • If you have been out of school for over seven years and are considering bankruptcy, you will be able to ‘discharge,’ or eliminate, the loans, as long as your creditors agree.
  • As an alternative to bankruptcy, you may also consider filing a consumer proposal, which will reduce your monthly debt payments and allow you to repay only a portion of your total debt. Just like bankruptcy, you must be out of school for at least seven years to include your student loans in a consumer proposal.
  • Only a consumer proposal or filing for bankruptcy can reduce or eliminate your student loan debt obligations.

What If I Don’t Qualify to Discharge Student Loans Through Bankruptcy?

You have many options available to you if you are having a hard time repaying your student loans:

You can see if you qualify for a Repayment Assistance Plan (RAP) to reduce your monthly payments or a Revision of Terms Plan to give you more time to repay your loans. We provide more details for managing your student debt on our Student Loan Debt page.

Our local debt professionals will be happy to review all of the options available to you. We will personally guide you through all the methods and steps you can take to eliminate your student debt. Request a call today for a free appointment, with no obligations.

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