Hi footloose, have you any idea of what you are saying? in one of your replies regarding student loans you said ".... income to support the repayment of the defaulted student loan....." What was the word you used? Repayment? RE-PAYMENT? why would anyone pay twice?, if you could understand English you would know the advice you gave was rubbish. If you don't understand the words you use, then don't use them

again-thank you and god bless you too.

You are now the most educated and informed student loan borrower. You know exactly how the system works and where you stand within the system. CONGRATULATIONS!!!!

The late Paul Harvey, a syndicated news columnist always ended his stories with the tagline............"and now you know the rest of the story".

I trust that I have provided to you and our many readers and members with "the rest of the story". In education, there is a tagline that says..............."Each one Teach one". You are now in the enviable position to share with others how the student loan system operates in Canada and what happens when a student loan borrower defaults on a student loan and Its possible consequences.

I have thoroughly enjoyed sharing with you my knowledge and experience. I am happy to know that you have invested your time to learn more about the student loan system. My tagline says it all.

Perhaps you can help others as I have helped you.

Good Luck and God Bless until we meet again.

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Educating one Consumer at a time

ohhh.ok. got it. sooo...it doesn't matter if you acknowledge the debt or not , what matters is the limitation period ONLY in order for litigation to occur.(acknowledgement or not..)

I guess they moniter the limitation periods closely-and after the 6 year period the system DROPS the lien - i am imagining it is a computer system that automatically does this after 6 years....I would assume? a human wouldnt manually go through files one by one.....!

just as an aside and to vent - the CRA and hrsdc always had my mothers address on file according to them(as i lived there after i got divorced) and they claimed that they have been sending notices and calling me there for years. I have ALWAYS updated my info with the govt. as well, my mom and i are very close (she lives 5 min away) and she would DEFINITLEY give me my mail or tell me the govt is calling me??!!
When i asked the CRA why am i just getting this notice NOW to my proper address - they stated they just "found me" now, and I was in their tracing system - i explained to them that revenue canada has my updated address and i file my taxes, so why didnt they get my info there? they explained the privacy laws and one branch of the govt cannot have access to the other to get info (address etc) i asked how they got my address, they just said they found me?! ( i guess that's true?)
believe me....they were NOT sending mail to my moms as i would have gotten it. Very very randomn

Before a creditor or the Attorney General of Canada or the Attorney General of a Provincial Jurisdiction can commence legal proceedings for the purpose of obtaining a judgement against a debtor, the debt must be WITHIN a limitation period and NOT "statute-barred". For example, let's say that you defaulted on a Federal student loan by ceasing to make any further payments because you lost your job and did not have sufficient resources to keep your student loan current and up to date. Let's also say that the date of default was October 15, 2007 and since that date, you did not make any further payments on this loan or you did not provide a written acknowledgement of this loan and signed by you to either the creditor or to a party ( such as the CRA or a collection agency ) who has been assigned to collect this debt.

Both the Canada Student Loans Act and the Canada Student Financial Assistance Act, provide for a limitation period of 6 years before the Federal student loan becomes "statute-barred". Using the example that I provided, this defaulted Federal student loan becomes "statute-barred" on October 15, 2013. That means that the creditor or the agent acting on behalf of the creditor can litigate ( commence a legal action ) at any time up to and including October 14, 2013 by filing a "Statement of Claim" in the Federal Court. Once the claim is filed, you are now officially "in the system".

On the other hand, if the "Statement of Claim" is filed AFTER October 14, 2013, this debt is now "statute-barred" and the claim will fail. Even if a "statute-barred" claim is served on a debtor ( which sometimes happens ), your Defence would be that the debt is "statute-barred". You would still have to attend a Hearing/Conference/Trial but unless the creditor withdraws the claim, the judge will then decide if the claim is "statute-barred" and unable to proceed. That is why it is so important to know when a debt becomes "statute-barred".

In Ontario, the Limitations Act, 2002 provides for a 2 year limitation period on commercial debts such as a credit card, bank loan, etc. But on defaulted Provincial student loans issued under the Ministry of Training, Colleges and Universities Act, there is NO LIMITATION PERIOD. As I said in a previous post, the Ministry can chase you on a defaulted Ontario student loan to your grave or until it is paid, whichever comes first.

It should also be noted that with Federal student loans ONLY, if an acknowledgement is made either WITHIN or OUTSIDE of a limitation period, it resets a new limitation period for a further 6 years. This provision is unique to Federal student loans and can produce expensive, unintended results.

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Educating one Consumer at a time

oh.....i see. wow. you must know ALOT of "interesting" people:)

1) so.....do you have to first "acknowledge" the debt BEFORE they can obtain a judgement? i guess by being unco-operative, it means that that you have FIRST acknowledged the debt, THEN ignore them all together? or you are just ignoring them all together is being uncop-operative?

...or like you said, there is no rhyme or reason...??!??!!!!

man, i am learning ALOT!!

It is difficult to speculate what is the motivation for the CRA to send a "Directive" to the Department of Justice requesting the Attorney General of Canada to commence legal proceedings in order to obtain a judgment for a defaulted student loan. I am not aware of any internal policy of the CRA that supports this action taken, therefore, I can only assume that it is decided on a case-by-case basis.

What is the criteria for taking such action? I have asked that same question to some people who have been employed by the CRA with no definitive answer.

It would seem to me that the first factor that the CRA would consider is the amount of the student debt outstanding. The next factor might be the student loan debtor's source of income. For example, is the debtor receiving welfare payments, disability payments, employment insurance, or is gainfully employed or self-employed and earning sufficient income to support the repayment of the defaulted student loan. Another factor would be if the student loan debtor owns real property ( i.e. a house ) to which the CRA could attach a lien against. Or the student loan debtor has been totally uncooperative with the CRA in attempting to reduce the outstanding balance of the student loan and the limitation period for commencing an action is soon to expire.

It has been my observation that given the financial state of our economy ( i.e. currently running a huge debt and deficit ) that the CRA has been "pressured" to aggresively recover outstanding debt that is owed to the Crown.

The latest "trick" that the CRA are using for "statute-barred" student loans is to correspond with the student loan debtor stating that the CRA wants to establish a workable repayment plan and for the debtor to complete an enclosed "Statement of Income and Expense Form", sign it and submit it to the CRA for consideration. By doing this, the debtor has just acknowledged the student loan and has reset a new limitation period for a further 6 years. Obviously, a very serious "trap" to avoid.

And so, when dealing with the CRA, one has to be "on their toes".

Which, by the way, reminds me of a sign I once saw hanging above a receptionist's desk of a company I once visited. It read"

"WE KEEP OUR SALESMEN ON THEIR TOES. WE RAISED THE URENALS 4 INCHES"

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Educating one Consumer at a time

i keep googling cause i know im pushing it with you...but i know you ll give me the proper answer...

one for the road to clear my anxiety...

Under WHAT circumstances will the CRA decide to sue someone for their defaulted student loan? such as in my case....have you ever hear of it happening? is there a system in place? I have to curb my nightmare...my best friend actually did get sued so it is a reality for me...
I have to STOP googling stuff - i actually read that the they will decide to sue so that they can extend the limitation period...? i promise my questions will stop! :)

an extremley heartfelt thank you. I know I am gushing but I cannot get over the fact at how thorough you have been - i cannot believe that you are providing this service to the community for free and just because you want to help!!

i had retained the services of a laywer - one in which i paid a small fortune - and he wasnt NEARLY as helpful as you are ...you would think he would be?!. You have always been so responsive, patient and non-judgemental with my flurry of questions. I now have a thorough understanding of my situation and would like to thank you from the bottom of my heart.

I feel as if i should send you a thank you card something but i dont know who you are...! But- good karma will be coming your way...

Who knows...you may hear from me soon.! ha..Im sure I will think of another question soon..

Thanks again.