Thinking of declaring bankruptcy? Don't be too hasty!
You're about to finish or have just finished school, you've taken out loans, and now, here you are, without a job and in debt. In a moment of panic, you think that bankruptcy is the only solution to your debt problem. But watch out! Before making such a major decision, it would be wise to discuss it—and its consequences—with the Student Advisory Centre or your advisor.
Consequences of declaring bankruptcy
- You'll be given a bad credit rating.
- Lending institutions will most likely turn down your applications for a car loan or mortgage.
- Landlords may refuse to rent out an apartment to you.
- You'll have a hard time getting a line of credit or a credit card.
- You'll have to prove that you've learned to manage your money wisely before any financial institution will trust you again.
What about your student loan?
Furthermore, if you're still a full-time or part-time student when you declare bankruptcy, or if you ceased to be a student within the past 7 years, the government, generally speaking, will not forgive your student loans.
Once the bankruptcy trustee has been discharged, the government will continue to have the right to seize your property to repay your student debt, subject to the rules of limitation then in effect. As a result, these debts will remain in your financial records for a certain amount of time after your bankruptcy.
Above all, don't wait until you start to feel the pinch before speaking with an advisor.
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