Your post contains bits and pieces of information that don't add up. Rather than cutting and pasting legislation, you need to contact the trustee who handled your application. AFTER you do this, then you can start asking questions, but I can pretty well guarantee you won't need to.

You said before that you couldn't find him/her, but I strongly suggest you make more of an effort. Start by looking at the discharge you were sent and then contact the local OSB office if you need to.

Hi All,

Can anyone provide a little insight to this I am trying to see if my situation is still considered Stats barred based on Section 16 in the Student Loan Act.

From what I gather if I was not a full time or part time student for 7 years when I filed for bankruptcy the Student Loan can be classified as discharged I finished the course at the end Of December of 1995 and the Bankruptcy is dated August the 29 2003 this clearly is inline with the 7 year rule outline in the Bankruptcy act that it can be considered to be discharged?

I had a risk shared CIBC student loan in November of 1995 for a 6 week course which ended in Dec of 1995 I never made any payments on this loan and declared Bankruptcy In August of 2003 and was it was discharged in March 2004.

CIBC would not include the student loan and the discharge states everything is discharged except for those matters in section 178 of the Bankruptcy act which refers to the student loan.

I contacted CIBC and asked why this loan was not stats barred and they told me they never received a discharge notice of my bankruptcy.

I was going to send the discharge to them but no wondering since it states in the notice the Loan was not discharged would this open up loop hole for them to reset the time line again.

In the Student loan act it states these limitations so I know the Bankruptcy would be classified as an acknowledgement and would have reset the 6 year time frame but after the 6 years I heard nothing from them so my understanding is they missed the time frame again after the bankruptcy so it would meet the 6 year period again.

But after reading section 178 of the Bankruptcy act concerning this I am confused as if they can reset the time and reactivate this debt?

Limitation period

16.1 (1) Subject to this section and section 16.2, no action or proceedings shall be taken to recover money owing under a student loan more than six years after the day on which the money becomes due and payable.

Marginal note:Deduction and set-off

(2) Money owing under a student loan may be recovered at any time by way of deduction from or set-off against any sum of money that may be due or payable by Her Majesty in right of Canada to the borrower or the estate or succession of the borrower.

Marginal note:Acknowledgment of liability

(3) If a borrower’s liability for money owing under a student loan is acknowledged in accordance with subsection (4), the time during which the limitation period has run before the acknowledgment does not count in the calculation of that period.

Marginal note:Types of acknowledgments

(4) An acknowledgment of liability means

(a) a written promise to pay the money owing, signed by the borrower or his or her agent or other representative;

(b) a written acknowledgment of the money owing, signed by the borrower or his or her agent or other representative, whether or not a promise to pay can be implied from it and whether or not it contains a refusal to pay;

(c) a part payment by the borrower or his or her agent or other representative of any money owing; or

(d) any acknowledgment of the money owing made by the borrower, his or her agent or other representative or the trustee or administrator in the course of proceedings under the Bankruptcy and Insolvency Act or any other legislation dealing with the payment of debts.

Section 178 Bankruptcy act states this

Recovering a Section 178 Debt

July 23, 2010

Issue

Some creditors are unaware of how to proceed when a debt appears to fall under section 178 of the Bankruptcy and Insolvency Act (BIA), while others, student loan creditors specifically, have indicated that they want the bankrupt's discharge order to specify that the student loan debt is included in the discharge, failing which they indicate they will pursue the debt as if not discharged.

Analysis

Subsection 178(1) of the BIA lists eight classes of debts that are not released by an order of discharge. These exceptions are based on an overriding social policy.

Subject to these eight exceptions, an order of discharge releases the bankrupt from all claims provable in bankruptcy. The claims listed in subsection 178(1) of the BIA are properly provable in bankruptcy. Proofs of claim may be filed for them and creditors can receive a dividend on them.

For student loan debt, if the bankruptcy is filed seven or more years after the date on which the bankrupt ceased to be a full- or part-time student, the bankrupt's student loan debt does not fall within paragraph 178(1)(g) of the BIA as an undischargeable debt and is, therefore, eligible for discharge along with the other dischargeable debts of the bankrupt. However, if it had been less than seven years since the bankrupt ceased to be a full- or part-time student at the time the bankruptcy was filed, then the student loan debt falls within paragraph 178(1)(g) of the BIA and is, therefore, an undischargeable debt that will not be released by an order of discharge. No further court order is needed with regard to these debts. Similarly, orders obtained prior to bankruptcy that conclusively bring a debt within section 178 do not require a further court order after the trustee's discharge.

For all other debts that are alleged to fall under section 178 of the BIA, a court ruling is the only conclusive way to confirm that this is the case and the onus is on the creditor to prove that its claim falls within subsection 178(1) of the BIA. There is case law to the effect that, on an application for discharge, the court will not make a declaration that the claim of a creditor is not released by the order of discharge, nor will it make a declaration that a debt is released by an order of discharge. For example, in Re Kierdorf (1990), 80 C.B.R. (N.S.) 6, 1990, the court concluded that the issue of whether a claim survives the bankruptcy cannot be determined at a discharge hearing. The court specifically held that "the hearing is summary in nature and is to determine whether the bankrupt ought to be discharged and, if so, what conditions, if any, should be imposed. The court has said on many occasions that it will not examine or determine other matters which can be dealt with at another time and in other proceedings."

By virtue of subsections 69.3(1) and 69.3(1.1) of the BIA, upon the bankruptcy of a debtor, a creditor is stayed from pursuing a claim provable in bankruptcy until the trustee is discharged. If a creditor has a provable claim that is not released by the bankrupt's discharge and if the trustee has not been discharged, in order to take proceedings against the bankrupt, leave must be obtained from the bankruptcy court (section 69.4 of the BIA). It is important to note, however, that sections 69 to 69.31 of the BIA do not apply in respect of a debt or liability referred to in subsection 121(4) of the BIA (family support claims).

From a practical perspective, it may be in the best interests of a bankrupt to voluntarily make payments during the course of his/her bankruptcy toward a debt that may not be discharged in the bankruptcy. In such circumstances, the creditor should contact the trustee and the trustee should ensure the debtor is fully aware of his/her rights and responsibilities. The Office of the Superintendent of Bankruptcy (OSB) recommends that the letter for a Section 178 Claim be reviewed and signed by the debtor with the trustee and retained on file, after which time the debtor can contact the creditor to discuss a possible resolution.

Conclusion

Creditors should not initiate or continue collection actions while a stay remains in place and should not, at any time, unilaterally declare that a claim is released by an order of discharge. It is the position of the OSB that sending a demand letter for recovery of a section 178 debt constitutes a collection action that is contrary to the provisions of the BIA.

It is also the OSB's view that the debtor should be made aware that the onus is on a creditor that alleges that its claim falls within subsection 178(1) of the BIA to prove that such is the case, and this is done by bringing an action in the ordinary civil courts, subject to the stay restrictions under the BIA. However, if upon receipt of proper advice from his/her trustee a debtor whose debt may not be released by an order of discharge wishes to make payments to a creditor, he/she may make arrangements to do so.

The creditors and the amounts owing would be listed on the discharge declaration from the court that your trustee would have sent to you. It isn't sufficient to tell the client that everything is hunky-dory. Did you not attend the court hearing as well?

You'd better ensure the bank and the Crown are listed on there. If in doubt, contact your trustee. In any event, the bankruptcy won't come off your credit reports until Jan., 2015, so it will be hard to obtain any credit, unless you've come into a high paying job since then.

BTW: When was your last payment or written acknowledgement of the loans, prior to 2008?

The student loans were the reason I ended up in bankruptcy after 10 years

The Students Loans never responded to the trustee nor did they oppose my discharge. This is something that just popped up. I was told by my Trustee that everything was discharged.

Was either student loan, for any reason, not discharged in your bankruptcy? The normal reporting period for 1st bankruptcies which are absolutely discharged in BC is 6 years from the date of discharge.

In 1997 I applied for Student Loans, the private school went bankrupt before I finished. The same year I applied for another student loan to complete what I was taking, and again the 2nd school went out of business before I finished. I left the school in Feb. 1998. In March 2008 I went into bankruptcy due to these student loans and being a single Mom couldn't afford to pay them. I was discharged in Jan. 2009. Recently I wanted to purchase a used car when I discovered that Scotia Bank has put on my Trans Union credit report in 2013 that there is still an open file even though I went bankrupt 5 years ago and have not been a student since 1998. This is like another slap in my face, its very discouraging.
Does Scotia Bank still have the right to put a debt on my credit rating? I read that after 6 or 7 years after finishing school this debt should disappear?

Comments please...