[joed677]

What is the easiest way to file a claim under section 178. I've been out of school for 10 years and file for bakruptsy 8 years ago. Made the payments I could but the have been with a collection service for tha past seven. I can't find anyone in my area that takes care of these problems. Any ideas. Thanks.

[Iknowalotofstuff]

If you Google s. 178 1.1 BIA and "take control don't be controlled" you will find a site with information.

[Iknowalotofstuff]

I now have more time to ask you question more completely.

S. 178 1(g) applies to any student loan debtor who did not cease to be a full or pat time student for 7 years (previously 10 years) at the date of their bankruptcy or consumer proposal. This means if you go bankrupt or make a consumer proposal before the limitation period has elapsed, upon the discharge of the trustee (not the bankrupt), the rights of the student loan creditors is revived.

S. 178 1.1 is designed to assist those student loan debtors who made their assignment or proiposat to soon. This section states that once the limitation period of 5 years (previously 10 years) has passed, the student loan debtor may apply to the bankruptcy court in the jurisdiction where they made their assignment for an order rendering s. 178 1(g) above inoperative in their bankruptcy and rendering their student loans subject to their earlier bankruptcy. This process is not a second discharge but part of the earlier bankruptcy or proposal. In order to succeed with your application, you must be able to establish that you have acted in good faith with respect to your loans and will continue to experience financial difficulty with respect to your loans.

There is an exception that readers should be aware of. Anyone who made an assignment or proposal between June 18, 1998 and July 7, 2008 was subject to a 10 year rule under s. 178 1.1. This meant that anyone who went bankrupt or made a proposal before the ten years was up would find their loans were not discharged. They would be required to wait for the 10 years to expire before they could make a hardship application under s. 178 1,1 On July 7, 2008, the act was amended and the ten year period was reduce to 7 and 5 rather than 10 and ten. Now if you go bankrupt or make a proposal and have been out of school for 7 years the loans are subject to discharge, A hardship application can be made after five years under the new rules Here is the catch. Any student who was out of school for 7 years and discharged after July 7, 2008, would find their student discharged. Any one whose discharge is after July 7, 2008 is subject to the 7 year rule even if the originally went bankrupt under the 10 year rule. I had a client who went bankrupt in 2003 who was not discharged for some reason. Under th 10 year rule she would have had to wait until 2013 assuming she eventually got her discharge. I obtained her discharge for her after July 7, 2008 which resulted in her student loans being discharged No court application was necessary under s. 178 1.1.

Getting back to s. 178 1,1...
A motion is made to the Bankruptcy Court for an Order rendering s. 178 1(g) on notice to the student loan creditors who could be the Federal Government, the Provincial Government or the bank you got the loan from. The documentation includes an affidavit in support of the motion that includes proof of good faith and financial hardship. You can include an case law that supports your position.

The case law has established a test to determine good faith. Did you use the student loans for their intended purpose? Did you attend school. Did you receive an economic benefit from the education? Did you make efforts to pay your loans based on ability to pay? Did you apply for interest relief or loan forgiveness? Financial hardship is determined by a Directive 11R calculation and a statement of income and expenses.

I may be able to help you make the application. What province do you live in? Google "Bathurst + take control + student loan" and read the information.

[Genoveva40]

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. I ended up making this application on my own and was successful. Ask your trustee for a referral (but also be sure to thoroughly check out that referral). I also received a great deal of help from the bankruptcy court that heard my previous bankruptcy. PM me if you want to know more.

[Smitty77]

Genoveva40, can you please contact me to let me know how to do this? How do I make this application? Please help.

[Genoveva40]

Smitty77

I don't know your situation, so I can only tell you what I did. I am located in Ontario and had Ontario and Federal student loans. First of all, I called the bankruptcy court that handled my bankruptcy. I set a time for when I would be coming in to the court and make my application(My court only heard these applicatons on Wednesdays). I had to give myself some time (i.e. three weeks) since I had to serve everyone involved(i.e. student loans departments and any collection agencies.) The administration assistant was very helpful and sent me a sample package of all of the paperwork that I would need to have to prepare to make the application i.e. Notice of Motion, Order, Affidavit and Affidavit of Service. I made the appointment and sent the Notices of Motion as a way of serving the other parties involved. They have a right to be informed of your application and court date and they may appear to dispute. Once I sent these Notices,I prepared an affidavit of service to prove that the relevant parties were served. (I needed to swear all of my affidavits before a Justice of the Peace.)

I then prepared my Affidavit based on the sample that was sent to me, although with my own personal information. I would think about having a lawyer or paralegal that you trust read over your paperwork for you. You have to prove(in your affidavit)to the registrar (or deputy registrar) that you have acted in good faith towards this loan and that there was and is no way you will be able to pay it off yourself in your lifetime . You will need to have all of this paperwork in to the bankruptcy court ahead of time so the registrar can read it over before your court date.

Basically, I am not a lawyer, this is not legal advice. I don't know your history and can only speak from my own personal experience.

Hope this helps.