New Student Loans Bankruptcy Rules Unexpectedly Passed by Parliament
In a stunning shocker, on December 13, 2007 The Senate of Canada gave third and final reading to Bill C-12 (which contains the new student loan bankruptcy rules). The Bill has now passed both the House of Commons and the Senate, so the Bill is now law. The next step is Royal Assent, which is a mere formality, and is expected to happen any day now.
Why am I surprised by these developments? Simply put, the Senate Standing Committee on Banking, Trade and Commerce for years has been saying that they want to review the legislation in detail before passing it. They had scheduled hearings after the Christmas break in February and March, 2008; over 20 more witnesses were expected to appear.
And yet, on Thursday, they decided to skip the hearings, skip the discussion, and simply pass the Bill.
This is great news for former students who want immediate relief, since if the new rules take effect early in 2008 former students with student loans who have been out of school for more than seven years will now be able to have their student loans automatically discharged in a bankruptcy. (You can read the full rules in my previous post on the new student loans in bankruptcy rules).
Of course if the Senate had actually studied the Bill it is possible that they would have recommended a shorter time frame, perhaps even a two year rule, but at this point, after waiting this long, some change is better than nothing.
When will Royal Assent happen? No one knows, but keep watching this space; as soon as we know, it will be posted here.
If you have student loans that you are unable to pay, and if you are considering a consumer proposal or personal bankruptcy in Canada, I strongly recommend that you contact a trustee to review your situation now, so that you are ready when the new rules receive Royal Assent.
Please tell me where you got this information, I have talked to someone who is a trustee and has been looking into this for me and she could not find anything regarding new legislation.
You may need to consult another trustee; you can find a list of trustees across Canada here: http://www.bankruptcy-canada.ca/emailUs.htm
As for the sources of this information, please review our previous blog entries; I get the information from various government web sites, and from discussions I have personally with government officials.
For example, information on Bill C-12 can be found on Parliament’s website here: http://www.parl.gc.ca/LEGISINFO/index.asp?Language=E&Chamber=N&StartList=A&EndList=Z&Session=15&Type=0&Scope=I&query=5298&List=stat
Looking for some help here. I spent a few hours this evening trying to read where the change was made to Subsection 178. The only thing I found was in relation to 178(e) and not 178(g) or 178(h)which speaks specifically of student loans.
I have been trying to find discussions on amendments or even a copy of the bill as was read without any success. Any help you can provide would be appreciated. I am under 10 years but over 7. This could be my happy new year wish!
I went bankrupt 3 years ago and my 10 year mark for student loans is this year. Does this mean that I could apply to have my student loan discharged in my bankruptcy? If so, who would do this?
I have read c-12 as passed and student loans are not mentioned even once? It appears that there is no amendment to the section of the act that deals with student loans.
Lots of questions; here are some answers:
First, there are two different bills; Bill C-55 which was passed in November 2005, which contained the new “7 year rule”, and Bill C-12, which was given Royal Assent on December 14, 2007, and didn’t change anything regarding student loans. As of February 1, 2008, neither Bill has come into force, presumably because the government needs time to prepare for the changes. Read my post on November 26, 2007 for more details.
If you already went bankrupt and your student loans were not discharged, you can go to court once ten years is up and ask the judge to discharge your student loans. To do this, contact your trustee, or a lawyer.
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