Student Loans and Credit Problems A Canada Bankruptcy Trustee Can Help

Posted by: Sandy Lyons on 07/06/2011

In tough economic times like these, many younger Canadians who took out substantial student loans to pay for their education are having difficulty keeping up with the payments on those loans.  Like many Canadians of all ages, the thought of getting financial advice from a Canada bankruptcy trustee never enters their minds.

Some young Canadians who start their work careers free of credit problems find themselves using credit cards to make payment on their student loans from time to time. 

While still in the early stages of getting into trouble, it is sometimes possible to pile on more credit by applying for new cards and credit limit increases, eventually the available credit runs out.  Unfortunately, many of these young Canadians are unaware of how difficult it can be to deal with student loans once they reach the point where they can no longer make the payments.

 Once they begin to search the Internet for information, they learn to their dismay that student loans less than seven years old cannot be included in a declaration of personal bankruptcy in Canada.  If that is your situation, how can a Canada bankruptcy trustee help? 

If you are in a financial hole, you need to know the dimensions of the hole and the tools you have available to climb out.  The dimensions are the details of your current financial situation – how much do you make, how much do you owe, and what do you own.  When you can answer those three questions with specific detail, you can begin to see your options.

Bankruptcy trustees are professional debt consultants, licensed by the federal government to work with Canadians in need of debt relief.  Despite what our professional title implies, we do more than manage bankruptcies.  In fact, the Bankruptcy and Insolvency Act of Canada (BIA) requires us to counsel anyone who walks through our doors on all available debt relief solutions.

Initial consultations are free of charge and we begin by assessing your circumstances to determine your options and help you select an appropriate solution.  For example, once you have a personal budget in place we can determine whether you can cut expenses and generate additional revenue sufficient to allow you to stay afloat until you reach the seven-year time limit.

 Another option is to declare bankruptcy right away.  Even though your student loans will not be included, you will no longer be making your other unsecured debt repayments and the additional income could be enough to comfortably cover your student loan repayments.