In bankruptcy law there is a distinction between unsecured debts and loans and bursaries. Although these are not guaranteed by any assets, bankruptcy law differs for these types of loans.
In the event of a bankruptcy, student loans can be released if the last class was taken 7 (seven) years before declaring bankruptcy. The law does not distinguish between full time students and part time students in this context.
However, it is possible to include student loans for courses that were taken five (5) to 7 (seven) years prior to declaring bankruptcy in the event where you are able to prove that these debts will cause you financial hardship in the future and if you have made efforts to repay them. You will need a court order to include student loans of 5 (five) years in your bankruptcy.
Please be aware that 7 (seven) years need to pass without taking a class. Even if only 1 (one) course has been taken, the count restarts, even if you did not get a loan for the class in question. This Act was implemented for all declared and ongoing bankruptcies after July 7, 2008.
For more information do not hesitate to contact us at 514-316-7057 to speak to our Licensed Insolvency Trustee or one of our insolvency professionals.