Student loan originally with CIBC bank. Last attended college June 2000 did not finish as my illness (physical and mental) made it impossible to attend and complete the course.
Health situation put me into debt so much so that I had to file for bankruptcy. The bankruptcy was competed on December 23, 2004, however, apparently could not include the student loan.
Since this time my health (physical and mental) has deteriorated, I am now on a provincial disability pension, income around $10,000 a year (which is below the Canada Poverty Level). The government of Canada for income tax and the B.C. government have me listed with the disability credit.
My family doctor has filled out forms for the CBV Collection Services stating that I will never be able to attend school nor will I ever be able to work again.
All information has been sent to the Medical Adjudicator Permanent Disability Unit for Canada Student Loans Program Via our MP's office and they will not accept the Doctor's statement but want All the reports from my psychiatrists and a list of all the medications I have been on. These reports go back to June 1987 when I first was diagnosed with depression and was suicidal.

What can I do? This person C. Barrard, Medical Adjudicator just does not accept my Doctor's statements nor the governments' disability credit status. And want me to obtain all the past reports. This would cost a lot of money if indeed I could even obtain them.

Your choices, unfortunately, are simple: either pay the loan(s) OR provide the information that they require.

There is no way around that.

Your study end date was in 2000. Your bankruptcy was prior to March 2004 and was discharged in December 2004. At the date of your bankruptcy, a Canada Student Loan was not subject to discharge unless you were out of school for 10 years. Since you were not out of school for 10 years, upon the discharge of your trustee in 2005 or 2006, the rights of your student loan creditors were revived. At this point, collection activity would begin again.

Due to your disability status, you have applied to have your student loans forgiven as a result of the disability. No matter what province you are in, this is a difficult process as you have discovered.

The Canadian Bankruptcy and Insolvency Act has a provision under s. 178 1.1. What it says is that when the limitation period of 10 years is over (amened to 5 on July 7, 2008) you may apply to have the provision that prevented your student loans from being discharged rendered inoperative and making these student loans subject to your December 2004 discharge. In order to be successful with this application, you must demonstrate that you have acted in good faith with respect to your liabilities under the loans AND that you are experiencing and will continue to experience financial hardship with respect to those liabilities.

As you are on some form of disability income now and probably for the foreseeable future, you will meet the financial hardship criteria. If you used the student loans for their intended purpose, attended school, did not obtain an economic benefit from the education sufficient to repay the loans, made every reasonable effort to repay the debt and applied for interest relief / granted loan forgiveness, you can demonstrate good faith.

I do not know what Province you are in so I cannot give your further direction. If you could post where you live, I will tell you how to proceed. You can make the application yourself and avoid the whole disability issue.

Wouldn't it be a lot easier to simply provide the info that is being requested? It would appear that the appropriate documentation has not bee provided. I find it difficult to believe (but, of course, I'm not in Canada) that the loan will be "forgiven" without this type of documentation.

The issue of outstanding student loans for those who have limited ability to pay is a big problem in Canada these days particularly in light of today's economic conditions.

S. 178 of the Act states that a student loan granted under the Canada Student Loan Act, The Canada Student Assistance Act or the enactment of any Province for the granting or guaranteeing of loans is not subject to discharge unless the bankrupt or consumer debtor (consumer proposal) has ceased to be a full or part time student for 7 years (prior to July 7, 2008 it was 10 years), If the debtor made an assignment prior to the expiration of the limitation period, the debts were revived upon the discharge of the trustee. However, when the limitation period eventually expired (five years now and retroactive), the debtors whose loans were not discharged could apply to the Bankruptcy Court to have them made subject to the discharge if they could establish the good faith / financial hardship provisions.

The medical disability forgiveness provisions are apart from the bankruptcy and insolvency act and are not a court process. It is an administrative process administered by civil servants. The guidelines and information required are different under this process than under the bankruptcy.

I will assume that Surrey is from British Columbia. She should contact the bankruptcy Court in BC and / or her trustee about a s. 178 1.1 application. If anyone is interested in how to make this application, please make a post and I will attempt to reply.

Surrey described her situation as having a problem with the administrative process and I offered her an alternative that might be easier than the process she is presently pursuing. The actual court cost for this process is $10.00. If the debtor contacts the court and does an internet serarch is some browser other than IE she will find out how to do this.

Canadian civil servants are grossly overpaid and there are far to many of them. It is my experience that they tend to act as if they are justifying there employment. They tend to make people jump through hoops when the facts are obvious.



One problem with this site is that you do not know where the posting parties live. It is to bad that under the user information a state / province is not listed. It would make it easier for all concerned to post replies. The purpose of my comment in the agree / disagree box was to show that your comments were not appropriate for Canada. Nothing personal. I will take your advice and ignore the box in the future.

The medical disability forgiveness provisions are apart from the bankruptcy and insolvency act and are not a court process.
Court may order non-application of subsection (1)
178 1.1
(1.1) At any time after five years after a bankrupt who has a debt referred to in paragraph (1)(g) ceases to be a full- or part-time student, as the case may be, under the applicable Act or enactment, the court may, on application, order that subsection (1) does not apply to the debt if the court is satisfied that
(a) the bankrupt has acted in good faith in connection with the bankrupt's liabilities under the debt; and
(b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.

A question:
The medical disability forgiveness provisions ARE NOT or ARE a court process?;)/according to 178 1.1 /

I find it difficult to believe (but, of course, I'm not in Canada) that the loan will be "forgiven" without this type of documentation.

Me,too.

do not know where the posting parties live. It is to bad that under the user information a state / province is not listed. It would make it easier for all concerned to post replies. The purpose of my comment in the agree / disagree box was to show that your comments were not appropriate for Canada. Nothing personal. I will take your advice and ignore the box in the future.



Perhaps when you've been around longer and are an expert you could make that suggestion.

YOUR STUDENT LOANS MAY BE ELIGIBLE FOR DISCHARGE IN YOUR EARLIER BANKRUPTCY OR PROPOSAL

WHAT DOES THIS MEAN? The Bankruptcy and Insolvency Act includes a process under s. 178 1.1 that allows student loan debtors who meet the criteria set out above to have their student loans rendered (made applicable) to their earlier discharge from bankruptcy. In order to be granted this form of relief, the debtor must prove to the Bankruptcy Court, on the balance of probability that they have acted in good faith with respect to their liabilities under the loans and are experiencing and will continue to experience financial difficulty with respect to their liabilities under their loans. Upon application to the Bankruptcy Court, your student loan creditors may consent to the relief or the Bankruptcy Court may grant the relief is the criteria has been met. If relief is granted, the Order made by the Bankruptcy applies to all of your student loans.
EXCEPTION: On June 18, 1998, the Bankruptcy and Insolvency Act was amended to create a 10 year limitation period. This meant that anyone making an assignment or proposal after that date would find their student loans were not subject to their discharge if they had not ceased to be a full of part time student for 10 years. Upon the discharge of their trustee, the rights of the student creditors would be revived and the debtor was again responsible for payment of principal and accumulated interest. The debtor would be permitted to make a hardship application under s. 178 1.1, as noted above, upon the eventual expiration of the ten year period. The Act was again amended on July 7, 2008. The limitation period of 10 years was reduced to 7 years and the time to wait to apply for hardship relief was reduced to 5 years. There were a substantial number of bankrupts or consumer debtors who had made an assignment or proposal prior to July 7, 2008 who had been out of school for more than 7 years at the date of that bankruptcy or proposal. If any of those bankrupts of consumer debtors were eventually discharged after July 7, 2008, there student loans would be discharged under the new 7 year rule. The debtor who went bankrupt under the 10 year would be able to take advantage of the 7 year rule if they were discharged after July 7, 2008. No court application is required.
The Bathurst Group "Take control don't be controlled" (http://www.thebathurstgroup.com/)

The following comments relate to Canadian bankruptcy only.

There are a large number of Canadian Debtors who have large unsecured debt in addition to their student loans. Some of these debtors make assignments or consumer proposals before the student loans become subject to their discharge.

Example:
Student "A" has several credit cards totaling $20000.00 and government student loans totaling $20000.00. "A" has been out of school for 4 years and is unable to pay his credit card debt. "A" makes an assignment in bankruptcy. A Stay of Proceedings went into effect when "A" made his assignment and it will remain in effect until his trustee is discharge. Upon the discharge of the trustee (at some period after the bankrupt is discharged), the Stay is no longer in effect and the rights of the student loan creditors are revived as the Student loan is not subject to discharge.
The credit card debt has been discharged.

"A" now has to decide what to do about the student loans. If "A" has the ability to pay the student loans, he should do so. If, however, he does not, he should act in good faith and pay what he can until (a) he goes bankrupt a second time when the s. 178 limitation period expires OR (b) he makes an application under s. 178 1.1. I would suggest that anyone curious about this process read s. 178 of the Bankruptcy and Insolvency Act as it is easy reading.

Making an application under s. 178 1.1 is not a second bankruptcy or a second discharge in the first bankruptcy. All a s. 178 1.1 application is simply a request to the Court that s. 178 1(g) no longer apply to the bankrupt. If the court grants the order, the discharge that released the bankrupt from the credit cards will now apply to the student
Loans. I would not suggest a second bankruptcy because it would be reported on the credit bureau file for 14 years after discharge (3 years... 17 years in total). An successful s. 178 1.1 application would be see the debt come off the credit file six years from the original discharge not six years from the date of the s, 178 1.1 order.

The Bankruptcy and Insolvency Act is a federal statute administered by the Superior / Supreme / Court of Queens Bench / Bankruptcy & Insolvency Division in the appropriate province in which the bankruptcy was filed. In Ontario (for example), it is the Superior Court of Justice (Bankruptcy & Insolvency).

You can ask your trustee where the bankruptcy court in your jurisdiction is.

There were some transitional provisions under the amendments to the Act on July 7, 2008 that could make an a student loan subject to discharge when at the date of bankruptcy it was belied they would not be. Prior to that date a student had to be out of school for a period of 10 years in order for the student loans to be subject to discharge. However, the transitional provision states that any one who was out of school for 7 not 10 years and discharged after July 7, 2008 would be subject to 7 year rule and the student loan was subject to discharge,

For Example
Date of Bankruptcy Jan 1, 2008
End of Study Date April 30, 2000
Discharge Date October 1, 2008

If the act had not been amended, the bankrupt would have to wait until May 1, 2010 (10 year rule) to apply for relief under s. 178 1.1. However, since the bankrupt had been out of school for 7 years (new limitation period) and was discharged after the amendments came into effect, the loans are subject to discharge by law and no court application is required.

I am aware of a specific case where this happened. "B" ender her studies in 1992 and made an assignment in October 1998. She did not complete her duties and was never discharged. One of her student loan creditors obtained judgment against her and began to garnish her wages. Upon completing her duties under the 1998 bankruptcy, she was discharged in January 2009. As she had been out of school for 7 years at the date of her assignment and was discharge after July 8, 2008, her student loans were discharged and the judgment rendered unenforceable.

I would be more than willing to address any specific questions that student loan debtors might have with respect to this subject.

Documentation of a medical condition could assist any student loan debtor in making a s. 178 1.1 application. The medical information could establish the financial hardship part of the test. But it is not the for the Court to grant hardship relief because of a disability. S. 178 1.1 suggests that the criteria for relief is acting in good faith and continuing financial hardship not a disability.

Both the federal and provinciial student loan programs have provisions that would allow a student loan to be forgiven if there is no possibility of it being paid regardless of whether the debtor was bankrupt or not. This process is not a court process and is determined by a division of the government student loan department / ministry bases on statutory provisions or rules.

Great! Let's go to Canada and get loans!The Canadian taxpayer as a loyal subject of Her Majesty will pay our debts!

Be careful with the Bathurst Group. The site has useful information, but caveat emptor. They took my money and disappeared. Look them up (William Bathurst) at the Law Society of Canada website.