Carol: Student Loan Debt Bankruptcy or Consumer Proposal?

Table of Contents

‘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, call us at 1-844-962-9200 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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Jerry was professional and was easy to deal with
Debbie Asquith
00:09 29 Nov 22
I was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
Melissa Blackburn
19:53 17 Nov 22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
Suzanna Vaclavik
12:21 16 Nov 22
Recently dealt with Christine at David Sklar & Assoc. and worked out a Consumer Proposal to put forth to my creditors for my Credit Card debt. She was very courteous, professional and put me at ease with a proposal that I can afford on a monthly basis, which will eliminate my debit in a reasonable timeframe. I would recommend Christine and this firm in a heartbeat. Very happy with the service and attention I got !!
Patrick Kovanchak
01:59 15 Nov 22
Excellent customer service. Special thanks to Olga for being prompt and helpful. She’s a star. Bibi is helpful as well. Great agency to work with.
Fady Tadros
19:28 14 Nov 22
After seeing your commercial play on CP24, I realized that it addressed all the questions and concerns I had about my financial situation. It all started with my one phone call to your office. I had the extreme pleasure of working with Cori Naron at your St. Clair West office in September 2022. She took the time to explain what my options were knowing that it was a very stressful situation with my debt load. She made me feel at ease with my decision to file a consumer proposal and outlined the benefits to me. She is thorough and her attention to detail is outstanding. While it takes a little while to reap the benefits of making this hard decision, she took the time to reassure me that it was in my best financial interest. Well done David Sklar & Associates for having such an amazing representative at your company and for allowing me to "get a fresh start"!
David
14:31 14 Nov 22
Very highly perfection individual, well executed and greatly knowledgeable in his work, which guided me me the right decisions making opportunities. Thank you.Sincerely, Peter Romasz
Peter Romasz
20:18 13 Nov 22
Trina Powell was very helpful and made the process very easy. Thanks again for all your help.
Jennifer Hager
17:59 06 Nov 22
Jerry is a caring, trustful, knowledgeable and competent Sklar associate. He understood my needs and quickly went to work on my behalf. Ever indebted to David Sklar and Associates and especially to Jerry for his professionalism and caring approach.
David Craig
19:31 31 Oct 22
Jerry Janiec is very knowledgeable and very helpful everything he explained to me was straightforward and very easy to understand. I'm very pleased to be working with Jerry to become debt free. I will definitely be recommending to any friends or colleagues your services.Thank you again for helping me get on the road to be debt free. 5 Stars is well deserved.
Christopher Rakobowchuk
17:41 27 Oct 22
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