In Canada, going to college or university has become the cost of entry to find employment. In fact, 64% of Canadians have a post-secondary education. Furthering one’s education has a lifelong income boost, but it can be hard to stay afloat when you’re just getting started, especially when student loans were used to pay for that education.
The average student in BC graduates with close to $35,000 in student debt. This leaves many students who are struggling to find a job after school wondering about their options to get out of student debt. If you’re wondering if bankruptcy will get you out of paying back student loans, we have the information you need.
Bankruptcy and Student Loans
As you may know, or will come to learn quickly if you’re doing some homework, there are some debts that will not be discharged by filing for bankruptcy. They include debt that came out of court settlements like fines, and child or spousal support. If you have been out of school for less than seven years, your student loans will also not automatically be discharged by filing for bankruptcy.
Furthermore, if you are planning to go back to school for further study and hope that the option of student loans will be available to you, know that filing for bankruptcy when you have student loans will quickly dash those hopes. Those facing extreme financial hardship may be able to apply for a release from your student loans.
Alternatives to Bankruptcy
The first thing to understand is that loan-holders are not evil overlords. They are organizations that have the reasonable expectation of getting paid the funds they agreed to loan. You usually have six months to start paying back student loans after graduation, but if you don’t have a job or you’re only working part-time, talk to your lender. You may be able to further delay your repayments, or make smaller payments initially. It all begins with a conversation, and the best time to have that discussion is while your account is still in good standing.
If you need help with budgeting, consumer proposals or bankruptcy filings, we are here for you. Contact us today to learn strategies to get out of debt in ways that won’t dampen your bright future.