BC Student Loans and Bankruptcy
If your financial situation has reached a point where declaring bankruptcy has become necessary, and you have outstanding BC student loans, you need to know as much as possible about BC student loans and bankruptcy before taking any further action.
First, if you have not finished your education, this could present a problem for you. Even if you are not including the BC student loans, which are not yet due, in your bankruptcy case, those British Columbia student loans will immediately become due, unless you are still in school, and in the same course of study. However, even if those loans do not become immediately due, you cannot receive more BC student loans for a period of eight to ten years – which could prevent you from finishing your education. If your BC student loans are a part of your bankruptcy case, they can be discharged, but not for a period of seven years, and then there is a three year waiting period after the discharge before you are eligible to apply again.
If you’ve already gone through the bankruptcy process, and the waiting period has passed so that you are eligible to apply for more BC student loans, you must go through a reinstatement process first. There are two separate processes for this purpose. The first is for your Canada Student Loans, and the second is for your British Columbia Student Loans.
You absolutely must obtain a clearance letter for your Canada Student Loans before you can be reinstated for your BC Student Loans. While the National Student Loans Service Centre will have its own requirements and process for being reinstated, this is the first step for reinstatement for BC student loans. You must then submit a reinstatement request to Student Aid BC, which will be reviewed by a committee.
This appeals committee will determine whether or not to reinstate you at all, and if they do opt to reinstate you, there are two options that they can choose from. The first is Conditional Reinstatement, and the second is Regular Reinstatement. Under Conditional Reinstatement is given to students who have filed bankruptcy while either still in school, or within the six month grace period after finishing school. The Regular Reinstatement is for those students who are no longer attending school.
The committee will take several different factors under consideration when deciding to reinstate you or not. They will want to know if there were exceptional circumstances that caused the bankruptcy, if you have tried to change your financial situation since the bankruptcy, that you have clear career and educational goals, and that you’ve shown previous academic success, or present academic success if you are still attending school.
This committee meets once each month, and once they have made a decision, it cannot be appealed – the decision is final. This is why it is incredibly important that you fill out the request form accurately, that you are clear in your communications, and that you supply all of the documentation and information that is requested from you in a timely manner. If you do not do these things, the committee will think that you are not very serious about finishing your education – or that it isn’t that important to you, and they could very easily deny your request, and at that point, any hope of reinstating your BC student loans is gone. You do have the option of applying again for reinstatement, but once you’ve been turned down, getting approval is quite difficult, and this would require additional documentation. For information about reinstatement for Canada Student Loans, visit the National Student Loans Service Centre. More on bankruptcy laws for Canada student loans. Visit: BC Student Loans and bankruptcy for more about British Columbia student loans and bankruptcy.
