Student Loan Debt and Consumer Proposals

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Consumer Proposals and  Your Student Loan Debt

Student loan debts are increasing for students, as cost of living and tuition increases as well. This leaves many students with a considerable student loan to manage.

Student loan debt is handled a little different than with unsecured debt. If you are considering proceeding with a consumer proposal, how will this affect your student loan debt?

For a student loan to be included within a bankruptcy, the student loan must be outstanding for over seven years from the date of completion of the student studies before it can be included within the bankruptcy.

With a consumer proposal, once the majority value of the unsecured debtors agrees to the proposal, then all unsecured creditors have to agree to the terms of the consumer proposal. The Student Loans Program will participate in dividends during the term of the proposal; however, you will be responsible for the balance outstanding after the dividends have been applied. (if the loan is under the 7 year mark)

If your student loan debt is under the 7 year mark, then we highly recommend that you keep making your monthly payments and on time. The other option is to contact your student loan department and see about making interest only payments. This can help you within your times of financial stress, and still keep help maintain your credit rating.

If you are troubled with student loan debt, here are some options you can look into:

If you have unpaid student loans and are considering a Consumer Proposal/Bankruptcy, you should to speak with David Sklar & Associates, Licensed Bankruptcy Trustees. If you live in the GTA, call to set up a free initial consultation, where we will assess your situation and explore all of your choices with you.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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