Student Debt Help FAQs

Get Answers to Common Student Debt Questions Here

If you’ve been lucky enough to pursue post-secondary education in Canada, the chances are you’ll be unlucky enough to have acquired significant personal debt in the process.

Unfortunately, it’s an inescapable fact for most of us – further education does not come cheap.

That investment in your future means you’ll be paying the price for quite some time – no matter how wise a decision college may be.

Here at BankruptcyCanada, we field many a question from people burdened with student debt.

It’s a common issue for hundreds of thousands of Canadians – and for some, that debt can become a real problem.

In this article, we intend to answer some of the more common queries we hear concerning student debt.

We’ll cover what those issues are, and the help available.

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How much does that average Canadian ex-student owe?

If you are experiencing a high level of student debt, don’t worry – you are not alone by any means.

A 2018 study estimated the average student debt in Canada to be a whopping $27,929.

When you couple that figure with the fact that almost half of Canadian scholars fund their post-secondary education by taking on debt, it doesn’t paint a pretty picture at all.

Not only that but being a student doesn’t ever get any cheaper – the cost of living and lectures just gets higher every academic year.

Government guaranteed loans are by far the most common form of student debt in this country.

Although a great deal of students also take on some type of private debt too, in order to fund their studies.

When do I need to look for help with my student loan debt?

All debt is harder to manage the longer it sticks around.

Generally, if you’re taking on debt you can expect to pay off over a relatively short period – that’s going to be healthy.

It basically means you’re earning enough to consider that amount of credit. However, student debt is a whole different ball game.

While post-secondary study is a relatively short-term thing, and most students can look forward to maybe forty or fifty years in a career after education – the debt accrued during study can be hard to shake off.

Here at BankruptcyCanada, we often help people who are well into their thirties and still have substantial, unmanageable levels of student debt.

In 2017, a study of ex-students between the ages of 21 and 39 found that 18% predicted they’d be paying down student debt for something between ten and twenty years.

Coincidentally, that’s the same percentage of people carrying student debt who became insolvent in Canada during 2018.

The other main problem with long-term debt is that it leads to dependency on other forms of credit – which makes the issue get worse and worse over a very short period.

Don’t leave it too long to talk about your debt.

Over a relatively short period, problems paying off credit can get a lot worse due to fees and interest.

For a free, no-obligation discussion about your options and circumstances, call a friendly BankruptcyCanada expert on (877) 879-4770 (24/7) without delay.

Can student loans be included in bankruptcy?

The answer to this question is yes – however, there are waiting periods before student debt gets discharged in Canada.

The standard amount of time required is seven years.

To explain, that’s the period that is required to have passed after you last studied.

You can’t get student debt discharged without going through the waiting period in Canada.

You can, however, get the period reduced to five years if you can prove financial hardship exists.

What the waiting period means is that you need to wait until it’s passed before you file for bankruptcy or use a consumer proposal to address your debts.

If you don’t wait, then the debt will survive the process.

If that’s going to be a big ask for you and you can convince a judge of the following, the period will be reduced to five years:


  • Your student debt is legitimate. That basically means you got into debt because of your studies. You’ll need to prove you used all the money to support yourself during and pay for your further education.


  • The debt is proving impossible to pay off. You’ll have to convince the judge that despite your best efforts, you aren’t able to pay down the debt and move on.


How do I determine my last date of study for bankruptcy purposes?

When it comes to student debt, consumer proposals and bankruptcy – you really can’t be too careful with the details.

The last thing you need if your debt is causing you difficulties and stress is to embark on something that isn’t going to work due to the debt being a government one.

If you’re at all unsure about working out your final study date, or about anything else connected with your circumstances and options – we recommend getting in touch on (877) 879-4770 (24/7) for a free, no-obligation chat with one of our expert advisors.

We’re here to help – and we assist thousands of Canadians with student debt problems every year.

Can you settle student loans in a consumer proposal?

The deal with student debt is the same for both consumer proposals and bankruptcy.

You’ll either need to wait for the seven year waiting period or prove hardship to a judge – before you enter into a consumer proposal or file for bankruptcy.

If you fail to do so, the debt will survive, and you’ll be back to square one in as far as the student debt goes.

The same rules apply, so that means your final study date should be used to calculate the waiting period.

It’s essential to get that right – and a licensed insolvency trustee is the best source of advice on the subject.

Can I stop making student debt payments while in bankruptcy or a proposal?

You can cease to make payments against nondischargeable student loans if you enter into a consumer or file for bankruptcy.

However, caution is required, and it’s not necessarily the best route to go down.

That’s because although under the Bankruptcy and Insolvency Act,  lenders can’t continue to pursue collection during the consumer proposal process – interest on the debt will continue to mount up.

That means that the debt won’t just not go away – and the principal amount outstanding won’t change during your consumer proposal journey – but it’ll also get bigger due to interest.

Once your consumer proposal process is over, you’ll be liable to pay the full amount.

That’s why many people keep paying what they can afford toward their student debt during a consumer proposal.

What about Canada private student loan debt forgiveness?

Private student loans are not government-guaranteed.

Therefore, they get treated just like any other unsecured debt if you file for bankruptcy or enter into a consumer proposal.

For the same reason, loans from private lenders have none of the waiting periods that apply to government loans.

Whether the lender is a bank, loan company, or even a credit union, your debt will be discharged during bankruptcy as if it were any other form of unsecured debt.

The same goes for a consumer proposal.

It’s important to note that although some debt relief programs exist for government-guaranteed student debt, in Canada, none exist for private versions.

Think twice before acting on information supplied by for-profit debt consultants – again, the best source of advice about student debt is your local licensed insolvency trustee.

Who should I speak to about getting student loan debt help?

No matter where you are in Canada, our network of local licensed insolvency trustees can help you to understand the rules about student debt – and your best way forward.

We’ve been helping all sorts of Canadians escape debt for decades – and we’re only ever a phone call away.

Get in touch today on (877) 879-4770 (24/7) so you can start planning a future without student debt.

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