S-219
Second Session, Fortieth Parliament,
57 Elizabeth II, 2009
SENATE OF CANADA
BILL S-219
An Act to amend the Bankruptcy and Insolvency Act (student loans)
first reading, February 3, 2009
THE HONOURABLE SENATOR GOLDSTEIN
3910703
SUMMARY
This enactment amends the Bankruptcy and Insolvency Act to provide that an order of discharge does not release a bankrupt from any debt in respect of a student loan if the bankruptcy occurred within a period of five years after the bankrupt ceased to be a student. It also allows for the bankrupt to apply at any time to the court for an order that releases the bankrupt from all or part of the student loan debt or that sets out terms for the repayment of the debt or any remaining portion of the debt.
Available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
2nd Session, 40th Parliament,
57 Elizabeth II, 2009
senate of canada
BILL S-219
An Act to amend the Bankruptcy and Insolvency Act (student loans)
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. B-3
BANKRUPTCY AND INSOLVENCY ACT
1. (1) Subparagraph 178(1)(g)(ii) of the Bankruptcy and Insolvency Act is replaced by the following:
(ii) within five years after the date on which the bankrupt ceased to be a full- or part-time student; or
(2) Subsection 178(1.1) of the Act is replaced by the following:
Application for court order — student loan debt
(1.1) The court may, at any time, on the application of a bankrupt who has a debt referred to in paragraph (1)(g), make an order described in subsection (1.2) if the court is satisfied that
(a) the bankrupt has acted in good faith in connection with the bankrupt’s liabilities under the debt; and
(b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.
Order of court
(1.2) The order referred to in subsection (1.1) is an order
(a) that subsection (1) does not apply to the debt referred to in subsection (1.1);
(b) that subsection (1) does not apply to part of the debt referred to in subsection (1.1);
(c) that subsection (1) does not apply to part of the debt referred to in subsection (1.1) and that, with respect to the part of the debt to which subsection (1) applies, the bankrupt pay moneys in an amount and manner that the court considers appropriate, having regard to the bankrupt’s conduct and ability to make payments; or
(d) that the bankrupt pay the debt referred to in subsection (1.1) by paying moneys in an amount and manner that the court considers appropriate, having regard to the bankrupt’s conduct and ability to make payments.
Factors to consider
(1.3) In considering an application under subsection (1.1), the court shall take into account, among other relevant factors,
(a) the extent to which the bankrupt has sought relief under debt reduction or repayment assistance programs available under the applicable Act or enactment referred to in paragraph (1)(g);
(b) any efforts that the bankrupt has already made to pay the loan;
(c) the bankrupt’s future earning capacity, including long-term employment prospects and expected increases in income; and
(d) the bankrupt’s current and future obligations, including obligations to the bankrupt’s family.
TRANSITIONAL PROVISIONS
Transitional
2. (1) The amendment to the Bankruptcy and Insolvency Act that is enacted by subsection 1(1) of this Act applies in respect of a discharge occurring on or after the day on which that subsection comes into force.
Transitional
(2) The amendment to the Bankruptcy and Insolvency Act that is enacted by subsection 1(2) of this Act applies in respect of a person who becomes bankrupt before, on or after the day on which that subsection comes into force.
Published under authority of the Senate of CanadaAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada
Explanatory Notes
Bankruptcy and Insolvency Act
Clause 1: (1) Relevant portion of subsection 178(1):
178. (1) An order of discharge does not release the bankrupt from
. . . 
(g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred
. . . 
(ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student; or
(2) Existing text of subsection 178(1.1):
(1.1) At any time after five years after a bankrupt who has a debt referred to in paragraph (1)(g) ceases to be a full- or part-time student, as the case may be, under the applicable Act or enactment, the court may, on application, order that subsection (1) does not apply to the debt if the court is satisfied that
(a) the bankrupt has acted in good faith in connection with the bankrupt’s liabilities under the debt; and
(b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.