Can I Declare Bankruptcy with Student Loans in Canada?

Declaring Bankruptcy For Student Loan Debt

Navigating the financial landscape when burdened with student loans can be a daunting task. You may find yourself pondering, “Can I declare bankruptcy with student loans in Canada?” Unraveling the fine print surrounding this issue can be equally intimidating, but we’re here to guide you through the process.

Understanding the 7-Year Waiting Period

An essential aspect to consider when contemplating bankruptcy due to student debt is the 7-year waiting period. This period starts ticking from your last day of education. It’s crucial to note that this is calculated from the day of your final exams, not the last day you attended class. If you jump the gun and file for bankruptcy before this period is up, you may face punitive measures as per Canadian insolvency laws.

Importance of a Licensed Insolvency Trustee

A Licensed Insolvency Trustee (LIT) can be a beacon in the stormy sea of bankruptcy laws. Their expertise can help you navigate this complex process. They offer guidance and ensure every aspect of the law is followed, eliminating room for error during the waiting period. Understand more about the role of an LIT from this informative article.

Automatic Discharge of Student Loans

Once the 7-year waiting period is safely behind you, preferably with a cushion of an extra 30 days or so, you’re eligible for an automatic discharge of your outstanding student loan. This application of the rule extends to consumer proposals as well.

Automatic Discharge


“The path to declaring bankruptcy with student loans in Canada may seem arduous, but with the right guidance and patience, it can provide a much-needed fresh start.”

Step 1: Determine last day of education
Step 2: Calculate 7-year waiting period
Step 3: Consult with a Licensed Insolvency Trustee
Step 4: File for bankruptcy post waiting period
Step 5: Automatic discharge of student loan


In conclusion, “Can I declare bankruptcy with student loans in Canada?” Yes, you can! But it’s critical to remember the 7-year waiting period, seeking guidance from a Licensed Insolvency Trustee, and the provision for automatic discharge. Armed with this knowledge, you can navigate the complex process confidently.

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