Bankruptcy Kitchener Blog by Scott Schaefer

I met with a woman in our Kitchener-Waterloo office to review her financial situation and to develop a plan for her future.  To outline her situation:

She is a single mother of two children 
She rents an apartment
She receives child support of $400 per month
She works for a large insurance company in Kitchener
Her net take home pay is $2,300 per month
She has a 1999 Pontiac Sunfire, worth about $3,000

With respect to her debts, the largest portion of her debts is student loans from the mid 1990’s.  The student loans totaled just over $30,000 and she has credit card debt of $11,000.  The student loans have been a issue for her over the years.  She had taken the Business Administration diploma at Conestoga College in Kitchener.  She did find employment after completing school, but over the past decade, she had two children and between not being able to make her student loan payments while on maternity leave and the costs of raising the children on her own she had limited amount of money she could pay towards student loans.

We discussed her debts, her monthly budget and family situation.  Then we reviewed her options in dealing with the debts.  Although she was disappointed her situation came to this point, her preferred option was to file personal bankruptcy.  In filing for bankruptcy, she is working to obtain a fresh start and move forward on a plan for the future.

One key element to this person’s decision to file for personal bankruptcy is her student loans.  The current rules state that a person must have ceased to be a full- or part-time student for 10 years before they can file for bankruptcy and have the debts discharged.  That is, if a person files for bankruptcy before 10 years have passed since they completed school, then the student loans would still be a debt they would have to pay after the bankruptcy is discharged.

In this situation, it was very important that she confirmed the actual end of study date that the government has on record.  I gave her the following phone numbers to confirm the end of her study dates:
Canada Student Loans 1-888-815-4514
Ontario Student Loans 1-807-343-7260
In addition, the other item she obtained to confirm this was her transcript.

If you are experiencing financial hardship and want to develop a plan for the future, please contact us via e-mail or call us at 310-PLAN (no area code required).

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