Student Loans in Bankruptcy Blog

Canada Student Loan Bankruptcy Legislation

Student loans in Canada are not automatically discharged in a bankruptcy or consumer proposal unless they are over 7 years old. This blog tracks changes to this legislation, and current student loan and bankruptcy developments.

Charter Challenge Rejected

On December 6, 2000 a constitutional challenge, supported by the Canadian Federation of Students, was filed against several provisions of the Bankruptcy and Insolvency Act as it pertains to student loans borrowers.

This challenge was heard in Ontario Superior Court on June 16, 2004 before the Honourable Justice Gordon Sedgwick. On June 30, 2005, after more than twelve months of deliberation, Justice Sedgwick issued his ruling, rejecting the challenge on the basis that student loan borrowers do not constitute a protected social category that should qualify for protection from discrimination under Section 15 of the Charter of Rights.

In summary, the court made no changes to the existing laws.

The Canadian Federation of Students press release offers more details.