Carol: Student Loan Debt Bankruptcy or Consumer Proposal?

‘Carol’ a Case History: Overwhelmed by Student Loans

In 2000, Carol (not her real name) came to David Sklar & Associates (DSAI) with major debt issues.

As a young, single mother in Scarborough with two small children, Carol found herself buried in unsecured debt from credit cards, bank loans and student loans. Working with Rhoda Lewis, an Estate Administrator at DSAI, Carol was able to declare Bankruptcy and erase her credit card and bank loan debts. Unfortunately, her student loans could not be discharged in a Bankruptcy, as it had only been 5 years since she had been a student. Although Carol had attended university for several years, she had been forced to withdraw before finishing, due to lack of funds and the demands of motherhood.

Finding a good job without a degree was a challenge, but Carol was able to work her way up from receptionist to a senior clerical position for a large Scarborough company.

Her children, while a blessing, were also a strain on her tight finances. As a single mom, she found herself unable to pay for her children’s needs – and to make all of her student loan payments.

Carol tried several times to negotiate lower payments, but without success. Eventually, her student loans went to collections – and Carol began to deal with ongoing pressure from collection agents. Her tax refund was seized by the Canada Revenue Agency for the federal portion of her student debt – and her life became much harder.

Carol did her best to pay back her loans, but was not able to make any headway. Finally, unable to handle the strain, she decided to get help.

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Dealing with Student Loan Debt

Carol came back to David Sklar & Associates (DSAI) in 2006 – and requested that Rhoda Lewis once again act as her Estate Administrator. Together, they closely reviewed Carol’s finances and options in detail. Because it had been more than 10 years since Carol had been a student, she was eligible to discharge her student loans debt in a Bankruptcy. Note: In 2008, the length of time before student loans could be discharged with a Bankruptcy was reduced to seven years after ceasing to be a student.

Carol learned that a second bankruptcy would stay on her credit history for 14 years. That a Consumer Proposal would most likely run for five years at the end of which, it would stay on her credit history for three more years.

Carol did not want to file for Bankruptcy again and she sincerely wanted to pay back as much of her student loans as possible, so she decided to file a Consumer Proposal. At the time of the filing, Carol’s net monthly household income was $3,200 (salary plus child tax credits). Her only unsecured debt was her student loans of $30,000, and she had no non-exempt assets.

Proceeding with a Consumer Proposal

Working with Rhoda and the Trustee, a Proposal was written up – and filed by DSAI. The Proposal was for a repayment of less than the total outstanding loans – with monthly payments of $325 for a period of 60 months.

The Consumer Proposal was accepted by Carol’s creditors – and the collection efforts ceased immediately. Carol was to make monthly payments to DSAI who would then distribute the money as per the terms of the Proposal.

Carol’s Consumer Proposal has been running successfully and should be completed in 2011. Carol remains pleased with her decision to pay as much as possible on her student loans.

To protect our client’s privacy, details of this case have been altered.

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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Ready to live debt free?

I cannot emphasize enough how thankful I am for Jackie Stanley's help with filing for bankruptcy.All of us dread being put in this position and we have a million questions about the process but trust me Jackie makes it so easy for you that you don't have to do anything yourself!She is very kind and friendly and puts you at ease right away. She emphasizes with you and let's you know it's not your fault.Most importantly when you leave that first meeting you will not believe the load that is taken off your shoulders. You can actually feel it!You are a godsend Jackie and I can't thank you enough!!I hope you are highly valued there as much as you are by me!
Sue Murray
18:45 05 Dec 21
Putting together and executing a Consumer Proposal can be daunting, that is unless you work with Cori Naron at David Sklar & Associates Inc. Cori's advice and support has been instrumental over the past five years. Thank you Cori!!
Barry Kuntz
20:37 01 Dec 21
I’m very happy with the services I received for Jackie Stanley who helped me get my finances in order. It was a quick and easy process & all of my questions were answered.
Amanda Frappier
01:18 19 Nov 21
I have had the privilege of being supported by Jackie at David Sklar Associate. She was very helpful, very professional and very friendly. She gave me the help I need. Thank you Jackie for your help.
Alex Taylor
22:03 17 Nov 21
Got my probe solved, great service
arny raposo
17:02 11 Nov 21
Jackie at Daivid Sklar and Associates is such a pleasure to work with. She explained everything in great detail and is always there when I have a question or concern. She really cares about her clients.
Steve Medica
09:33 10 Nov 21
I filed a proposal with another group, which came in as a referral from one of my brokers. My experience went from ok to bad to worse, due to lack of communication and education on the process I was to embark on. I worked with Cori Naron in the past, and I came to her now for help on literally doing the work that the other group should have done. Cori stepped in, educated me, advised on rights, responsibilities, how the process works and what potential outcomes may happen. I do not have enough words of recognition and gratitude for what she did - she alleviated stress, anxiety, dead-end thoughts and she made me live again. Congrats to DSklar for hiring her and retaining such talent.
Giani Kokolakis
18:45 25 Oct 21
Very professional service. Before contacting David Sklar & Associates i contacted bunch of other firms they seemed fishy. After I spoke with Jason Sklar at Hamilton Office I discovered professionalism with hope. I was explained every step of my situation with solution professionally. Thank you David Sklar & Associates.
Wajay Awan
07:29 12 Oct 21
I met David a few months ago and i am glad I did. He has helped me all the way through my bankruptcy with good advice and explained every step of the process. David is a very down to earth and very professional. Anytime I've had a question I was able to reach out to David by phone or email and he always got back to me. If your struggling with your bills and need a way to get help, I strongly recommend David Sklar &Associates to help you. My experience with them on 1-5scale would be a 5;; My life is so much better now, thanks to David Sklar.
Bruce Locke
16:13 08 Oct 21
I have had the privilege of being supported by Jackie S, at David Sklar n Associate.She was helpful, professional and friendly. I was able to get the help I needed at a difficult time in my life. I would recommend anyone who needs support with working out their debts to ask for Jackie, she will be waiting to assist however she can to help you through your debts. She works with a team who is always ready and responsive.Thank you Jackie and your team:)
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15:17 09 Sep 21
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