What can I do if I cannot make my student loan payments?

bankruptcy-150x150What can I do if I cannot make my student loan payments?

Thousands of Canadians cannot afford to pay their student loans. The law in Canada punishes anyone making a consumer proposal or filing for personal bankruptcy if they recently stopped being a full-time student. Student loans are not forgiven unless a person can satisfy the 7-year waiting period or the discretionary 5-year waiting period based on financial hardship.

If you cannot make your monthly student loan payments then you do have a number of options:

Firstly, your lender might offer a number of debt relief options. Secondly, it might be to your advantage to make small token monthly payments. Thirdly, if you have not made a payment on your student loan for a minimum of six months you can explore negotiating a one-time lump sum payment as settlement in full—sourcing funds from family members or the sale of an asset.

Finally, you might want to consider credit counselling as a “bridging strategy”. Credit counselling might help you reduce your monthly payments on your unsecured consumer debt—but not your student loan -which might significantly improve your cash flow situation. Some Canadians seeking personal bankruptcy or a consumer proposal will use credit counselling until they satisfy the all-important 7-year waiting period.

If you want to make a consumer proposal or file for personal bankruptcy and you have ceased attending school a minimum of 5 years—but not 7 years–then you can bring a motion before a judge who has a discretion to grant you a discharge on the grounds of financial hardship.


Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

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