Student Loan Insolvency & 7-Year Rule Calculator
Check if your Canada Student Loans or provincial student debt qualify for 100% discharge under federal insolvency laws.
Under Section 178(1)(g) of the Bankruptcy and Insolvency Act (BIA), government-guaranteed student loans are non-dischargeable until 7 full years have passed since you ceased to be a full-time or part-time student. Calculate your exact statutory discharge date below.
Student Loan Bankruptcy & Proposal Eligibility Calculator
Status Analysis
How Student Loan Forgiveness Works Under Canadian Insolvency Law
In Canada, student loans receive unique treatment under the Bankruptcy and Insolvency Act (BIA). Whether your student debt can be eliminated depends entirely on two factors: **who issued the loan** and **how long you have been out of school**.
| Loan Type | Governing Body | 7-Year Rule Applies? | Discharge Availability |
|---|---|---|---|
| Canada Student Loan (CSL) | Federal Government (NSLSC) | Yes (BIA Sec. 178) | Full release after 7 years (or 5 years via hardship) |
| Provincial Student Loans | Provincial Government | Yes (BIA Sec. 178) | Full release after 7 years (or 5 years via hardship) |
| Bank Student Line of Credit | Private Financial Institutions | No | Dischargeable immediately in Proposal or Bankruptcy |
| Credit Card / Overdraft | Private Financial Institutions | No | Dischargeable immediately in Proposal or Bankruptcy |
The 3 Student Loan Discharge Milestones
Non-Dischargeable Zone
Government student loans cannot be discharged in bankruptcy or reduced in a proposal. However, a Consumer Proposal can compromise all other debts to free up budget room for your loan.
Hardship Relief Window
Under Section 178(1.1) of the BIA, you can apply to the court for early student loan discharge if you acted in good faith and will experience ongoing financial hardship.
Full Discharge Eligibility
Once 7 years have passed since your study end date, government student loans are treated like normal unsecured debt and wiped out completely upon bankruptcy discharge or proposal completion.
Frequently Asked Questions
The 7-year clock begins on the last day of the month in which you ceased to be a full-time or part-time student (known as your "Ceased Studies Date"). Returning to school full-time or taking additional funded courses resets this clock.
No. The 7-year rule applies strictly to government-guaranteed student loans (CSL and provincial loans). Bank lines of credit, student credit cards, and private loans are treated like standard unsecured debt and can be discharged immediately in a bankruptcy or Consumer Proposal regardless of when you finished school.
If your loan is under 7 years old, the federal Stay of Proceedings halts active collection calls and wage garnishments while your proposal is active. However, because the loan principal is not compromised, interest will continue to accrue unless you make voluntary payments or negotiate terms after your proposal completes.
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