Student Loan Debt Relief

Are you having trouble repaying your student loan debt?

student loan debt relief

Student loan debt can be stressful and frustrating. We can help you find debt relief, so you don't have to handle it alone.

Dealing with student loan debt

You’ve completed your studies and are working to establish your career. You may also be eager to purchase your first home, start a family, and pursue other life goals. But your student loans are holding you back. And you’re anxious about how long you’ll be slavishly paying down the balance. Luckily, there are student loan debt relief solutions in Canada that offer a way out of this grim scenario. 

david sklar licensed insolvency trustee

How to find student loan debt relief in Ontario

We have some good news if you’re struggling with student loan debt. It’s possible to say goodbye to that taxing monthly bill, along with the irritating collection calls that go along with it. 

There are two student loan debt relief options in Canada we suggest pursuing: filing a consumer proposal or declaring personal bankruptcy.

Depending on your circumstances, one debt relief option may be more suitable for you than the other. Our knowledgeable and personable team of debt counsellors can help you figure out which is best.

Student Loan Debt Law in Ontario

Before we dive into the details, it’s crucial to understand the basics of how student loan debt is treated under section 178 of the Bankruptcy and Insolvency Act (BIA) in Canada. Whether or not you can include your student loan in a consumer proposal or bankruptcy hinges on whether you meet the “seven-year rule.” 

Student loans debt relief and the
seven-year rule

If it has been seven years or more since you last attended post-secondary studies you qualify for student loan debt relief. You can safely discharge your loans through a bankruptcy or as part of a consumer proposal.

If it has been less than seven years since you were a student, your student loan will not be automatically discharged through bankruptcy or a consumer proposal.

student loan debt relief

Private vs government student loans

Government student loans are those issued by the federal government, such as those provided by the Canada Student Financial Assistance Program (CFSA). The same applies to provincial student loans, such as those offered by the Ontario Student Assistance Program. These government loans can be discharged under the BIA if you satisfy the seven-year rule.

On the other hand, private student loans, such as a student line of credit from your bank, automatically qualify for debt relief. There’s no waiting period, and it doesn’t matter how old the debt is.

Filing a consumer proposal to reduce your student loan debt

A consumer proposal allows you to negotiate a new debt repayment plan with your creditors under the advice and guidance of a Licensed Insolvency Trustee. You may be able to discharge up to 80% of your student loan debt, along with your other debts, leaving you with a much smaller balance to pay down.

Filing for a consumer proposal also provides you with numerous legal protections and financial benefits:

  • Collection calls cease immediately
  • Interest charges stop accruing
  • Your creditors cannot pursue legal action against you
  • Your assets are safeguarded from seizure

     

But let’s suppose your student loan debt doesn’t satisfy the seven-year rule requirement. In that case, you’ll be unable to discharge your student loan debt as part of a consumer proposal with your other unsecured debt. Once you complete your consumer proposal, you’re still responsible for repaying your remaining balance and the interest that accrued during the consumer proposal.

However, you can legally hit the pause button on your student loan payment while your consumer proposal takes place. Banks, governments, and other private lenders won’t be able to chase you down to collect payment. Once you complete your consumer proposal, you’ll have a much stronger financial position to tackle your student loan debt. It’s a win-win for both you and your creditors.

Eliminating your student loan debt through bankruptcy

Filing for personal bankruptcy is an alternative option to ridding yourself of burdensome student loan debt. Completing bankruptcy proceedings will entirely abolish your unsecured debt, including student loans that qualify under the same seven year rule.

Compared to a consumer proposal, bankruptcy is a more drastic option to escape burdensome student loans: you may need to surrender assets you own, and your credit score will suffer for a longer period.

However, it may be the right solution if you’re facing severe debt challenges. Eliminating your debt will allow you to clean the slate and rebuild your finances from the ground up.

As with a consumer proposal, even if the student loan debt will not be discharged, bankruptcy will enable you to halt your student loan payments until you resolve your other unsecured debt.

Can you reduce your student loan payments through debt consolidation?

A less common option for reducing student loan liabilities is a debt consolidation loan. It involves applying for a new loan to pay off your existing debt all at once. You’ll then be responsible for repaying a single loan with one monthly payment at a lower interest rate.

Unfortunately, reducing your total interest expense is really the only benefit of consolidating debt. You’re simply trading your student debt for another loan. And government student loans already come with low-interest rates (around 2.5%). 

In addition, once you transfer your student loan balance to a debt consolidation loan, you lose access to government financial assistance programs like the Repayment Assistance Plan. And you can longer write off your student loan interest on your tax return.

Our professional recommendation

It may be tempting to apply for a debt consolidation loan to eliminate your student loan debt, as it’s a quick fix. However, we strongly recommend that you explore other student debt relief options. A consumer proposal is the least expensive form of debt consolidation – you don’t pay a single dollar in interest charges.

Ironically, many of our clients come to us for debt relief from their debt consolidation loans!

Learn more about how we can help you find student loan debt relief with a consumer proposal or personal bankruptcy.

Our passionate and experienced team at David Sklar and Associates has helped thousands of individuals achieve student loan debt relief. Our experts can answer any questions about your student loans and recommend a solution based on your needs and goals. Let us help you pave the way for a brighter financial future, starting with a free, no-obligation consultation.

What our clients are saying.

Based on 752 reviews
Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
22:08 01/13/23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
02:33 12/29/22
I was a reck talking yo Jason Sklar was easy comfortable he explained everything and put my mind at ease I would recommend the team od sklar to everyone. I have already talked to my ci workers about them
01:13 12/22/22
The team at David Sklar & Associates is fantastic.I worked with Jerry whom not only made - what seemed like intimidating process to initiate at first - comfortable.He made everything transparent and took the time to explain the process every step of the way.He was kind, attentive, and professional. Everything was made straightforward and stress free and we found a solution together that worked.Thanks to Jerry and the team.
18:22 12/21/22
From day one till the end which is today😁 DavidSklar gave me a 5star service and treatment. And I will 100% recommend him and his Associates. This is the best Christmas present ever! Thank you David! More business to come! Merry Christmas and a Happy New Year!!!
16:37 12/16/22
I FOUND DAVID SKLAR & ASSOCIATES BY GOOGLING "BANKRUPTCY" (EARLY NOV. 2021). ON NOV.4, 2021 I HAD A MEETING WITH CORI NARON AT HER OFFICE AT ST CLAIR ANDBATHURST. HER POSITIVE APPROACH TURNED ASTRESSFUL SITUATION INTO A STEP BY STEP UNDERSTANDABLE PROCESSON SEPT. 23, 2022 I OBTAINED MY AUTOMATICDISCHARGE FROM BANKRUPTCY AND MY CERTIFICATE OFDISCHARGE.THANK YOU CORIBRUCE BURGESS
21:35 12/02/22
Jerry was wonderful and provided superb service. He is very knowledgeable, trustworthy, and made an intimidating and shame filled time in my life stress free. I hesitated for a long time to take the next step, but Jerry answered all questions, was patient and made the process effortless. I am eternally grateful, and highly recommend Jerry’s services.
18:41 12/01/22
Jerry was professional and was easy to deal with
00:09 11/29/22
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Getting into debt is easy. Getting out is a different story.

But it's still possible!

Did you know there is a Canadian debt relief program federally regulated by the Canadian Government, designed to help citizens avoid claiming bankruptcy? This amazing program can only be administered by a Licensed Insolvency Trustee (LIT).

If you’re struggling to make your payments every month and creditors won’t stop calling, we can help.

What our clients are saying.

Based on 752 reviews
Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
22:08 01/13/23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
02:33 12/29/22
I was a reck talking yo Jason Sklar was easy comfortable he explained everything and put my mind at ease I would recommend the team od sklar to everyone. I have already talked to my ci workers about them
01:13 12/22/22
The team at David Sklar & Associates is fantastic.I worked with Jerry whom not only made - what seemed like intimidating process to initiate at first - comfortable.He made everything transparent and took the time to explain the process every step of the way.He was kind, attentive, and professional. Everything was made straightforward and stress free and we found a solution together that worked.Thanks to Jerry and the team.
18:22 12/21/22
From day one till the end which is today😁 DavidSklar gave me a 5star service and treatment. And I will 100% recommend him and his Associates. This is the best Christmas present ever! Thank you David! More business to come! Merry Christmas and a Happy New Year!!!
16:37 12/16/22
I FOUND DAVID SKLAR & ASSOCIATES BY GOOGLING "BANKRUPTCY" (EARLY NOV. 2021). ON NOV.4, 2021 I HAD A MEETING WITH CORI NARON AT HER OFFICE AT ST CLAIR ANDBATHURST. HER POSITIVE APPROACH TURNED ASTRESSFUL SITUATION INTO A STEP BY STEP UNDERSTANDABLE PROCESSON SEPT. 23, 2022 I OBTAINED MY AUTOMATICDISCHARGE FROM BANKRUPTCY AND MY CERTIFICATE OFDISCHARGE.THANK YOU CORIBRUCE BURGESS
21:35 12/02/22
Jerry was wonderful and provided superb service. He is very knowledgeable, trustworthy, and made an intimidating and shame filled time in my life stress free. I hesitated for a long time to take the next step, but Jerry answered all questions, was patient and made the process effortless. I am eternally grateful, and highly recommend Jerry’s services.
18:41 12/01/22
Jerry was professional and was easy to deal with
00:09 11/29/22
Next Reviewsjs_loader
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We are David Sklar

Our team of Licensed Insolvency Trustees in Ontario can help you get out of debt and in control of your own financial future. We’ve helped thousands of people and we can help you too. 

We know this is stressful, but you're not alone.

It’s going to be okay.
Book your free consultation today. We’ll do the rest.