A post-secondary education is a valuable investment for your future that can provide more job opportunities and help to develop your career. However, many Canadians cannot afford to pay for schooling without the assistance of a government student loan. With fluctuations in our economy, finding or maintaining employment in an area of your study can be challenging. Other factors such as illness or injury may also make it difficult to pay down your student loan.
The Canada Revenue Agency (“CRA”) collects Canada Student Loans and may also collect Provincial Student Loans that are in arrears. The CRA has very broad and extensive powers to recover amounts owed for unpaid student loans. In addition to your credit rating being negatively affected or your student loan being assigned to a collection agency or your becoming ineligible for further student loans, the CRA may pursue the following collection activity:
The CRA may set-off amounts owed to you by the federal government such as goods and services rebates or income tax refunds to pay amounts that you owe for a Student Loan.
2. Requirement to Pay or Garnishment
A Requirement to Pay (“RTP”) or garnishment may be issued by the CRA to a third party (bank or employer) to garnishee your bank account, wages or other income such as commissions, bonuses or vacation pay.
3. Debt Certification with Federal Court of Canada
The CRA may register your Student Loan debt with the Federal Court of Canada to obtain a certificate of the amount you owe. The certificate is like a judgement which makes your student loan debt a public record. The certificate enables the CRA to register your debt at Personal Property Registry, register a Writ against your residence, recreational property, investment property, car or recreational vehicle.
4. Seizing and Selling Assets
Once the CRA registers your Student Loan debt with the Federal Court it has the power to seize and sell your assets such as your home, recreational property, investment property, car or recreational vehicle through a court enforcement officer. The proceeds from the sale of your assets will be applied to your Canada Student Loan debt.
If it has been more than seven (7) years since you last attended a post secondary institution your student loan will be included in a consumer proposal or personal bankruptcy debt restructuring plan.
If it has been more than five (5) years and less than seven (7) years since you last attended a post secondary institution the Court will determine whether your student loan will be released in a consumer proposal or personal bankruptcy debt restructuring plan.
If it has been less than five (5) years since you last attended a post secondary institution your student loan will survive a consumer proposal or personal bankruptcy debt restructuring plan.
Student loan debt giving you a less than average grade?
Don’t worry. Call us today to discuss your options in dealing with student loan debt and determine what debt restructuring plan is right for you.
Thank you very much for all your help and giving us pointers.Marguerite and Jeff