Is New Legislation Expected Soon?
On May 5, 2005 the government of Canada announced plans to create a Wage Earner Protection Program to help pay up to $3,000 owing to workers in the event that their employer goes bankrupt. Buried deep within that press release was a reference to further comprehensive bankruptcy reform, which may include changes to how student loans are handled in a bankruptcy.
Specifically, Industry Minister David L. Emerson stated that “The Wage Earner Protection Program is designed to remedy this gap and to form part of a comprehensive insolvency reform package, which I intend to introduce this spring.”
It is therefore possible that at some point this spring the long-awaited reforms to the Bankruptcy & Insolvency Act may be introduced. Unfortunately we have no idea what the reforms will be, although the speculation is that the 10 year waiting period for student loans to be discharged in a bankruptcy will be reduced to 5 years.
Of course if the government is defeated and we are thrown into an election campaign, legislation will not be passed, so stay tuned to this space for further developments.
hi if anyone reads this, i have a question id like answered… does the 10 year law on student loan banruptcy mean that 10 years from the time the loan was received or from the last date of a volentary payment was made? If you know the answer please email me at beachbunny26@hotmail.com
If the legislation changes and reduces the 10 year gap to 5 years, will it be grandfatherable for people who have done a consumer proposal but the student loan survived the duration of the proposal. Please send information to jnjpaille@aol.com
In response to the two comments posted:
First, ten years means ten years from when you ceased to be a student, not from when the loan was received. So, if you received the loan in September, and finished school in May of the following year, the ten years starts from May.
Second, as to whether the new legislation will be grandfathered, at this time we don’t know. We hope it will be, but until the legislation is passed, there is no way to now for sure.
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