A very common question is whether a Consumer Proposal or Bankruptcy can help with Provincial or Federal student loan debts. This depends on how old the student loan debt is. According to the Bankruptcy and Insolvency Act, you can eliminate student loan debt through bankruptcy or Consumer Proposal if your loans are more than seven years old from the date you finished at the post-secondary institution you attended.
Therefore, if you’ve been out of school for more than seven years and are struggling to pay down your debt, you could find relief by speaking with a Licensed Insolvency Trustee and reviewing your options.
If it has not been seven years since you completed your schooling, your student loan cannot be eliminated or settled in a Consumer Proposal or Bankruptcy.  However, a Consumer Proposal or Bankruptcy can still provide legal protection for any student loan debt for the duration of either process.  The federal and provincial government may also provide some hardship programs that we can further explore.
Keep in mind that while a Consumer Proposal or Bankruptcy will not specifically reduce or eliminate your student loan debt if this debt is less than seven years old, these processes provide legal protection, as mentioned above, and can help reduce or eliminate all of your other sizable debts (like credit cards with high interest rates), freeing up money in your monthly budget to cover the student loan repayment without further financial stress.