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What We Do

Get Out From Under
Your Student Loans
For Good

Behind on OSAP, Canada Student Loans, or a student line of credit? A Licensed Insolvency Trustee can stop garnishments, halt CRA refund offsets, and reduce or eliminate what you owe.

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★ 5.0 Google Rating·99% Success Rate·Confidential·No Obligation
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Diploma · Conferred
Bachelor of Arts
NSLSC · StatementNo. 2026-04
Balance Owing
$38,400.00
RESOLVED
Student Loans Reduced
Under Federal Law
Stop wage garnishments
Stop tax refund offsets
Reduce debt up to 80%
One affordable monthly plan
The Basics

What Counts as Student Loan Debt?

Student loan debt isn't just one thing. There's government-issued student loans — OSAP, Canada Student Loans, and provincial portions — and there's private student debt: bank lines of credit, credit cards used for tuition or living expenses, and family loans.

Each type is treated differently under Canadian insolvency law. Government student loans have special rules — including the well-known seven-year rule — while private student debt is treated like any other unsecured debt and can be reduced or eliminated at any time.

Most people we see have a mix of both: an OSAP balance plus a student line of credit, plus credit cards that filled the gaps. The right strategy depends on the breakdown.

Typical Student Debt Load
Sample illustration
OSAP & Canada Student Loans$24,800.00
Student line of credit$8,600.00
Credit cards (tuition / living)$5,000.00
Accrued interest+$3,400.00
Total student debt$41,800.00
In a Consumer Proposal~$12,000
All four debt types can be combined into a single Consumer Proposal once you meet the seven-year rule on the government portion.
The Rule You Need to Know

The Seven-Year Rule

Government student loans can only be discharged in a Consumer Proposal or Bankruptcy after a set waiting period. The clock starts the day you stop being a full or part-time student.

Years since last day as a student
Day 0
You leave school
Loans not yet dischargeable
5 Years
Hardship application possible
Court approval required
7 Years
Loans fully dischargeable
Through Proposal or Bankruptcy
Under Section 178(1)(g) of the Bankruptcy and Insolvency Act, OSAP and Canada Student Loans are only released by a Consumer Proposal or Bankruptcy filed seven years or more after your last day as a student — or five years with a successful court hardship application.
If You Default

What Happens When Student Loans Go Unpaid

A defaulted student loan is sent to the CRA for collection.The CRA has powers most ordinary creditors don't.

Refund & benefit offsets
CRA can divert your tax refunds, GST credits, and other federal payments to pay down the loan — for as long as the balance is in default.
Interest keeps growing
Interest on defaulted government student loans continues to accrue and is added to the balance — often pushing the amount owing well above what you originally borrowed.
Credit score destroyed
A defaulted student loan stays on your credit report for six years after it's resolved — making it nearly impossible to qualify for a mortgage, car loan, or rental.
Lawsuits & collection calls
Student lines of credit from banks aren't routed through CRA — they go to third-party collection agencies that can sue, garnish, and call relentlessly.
How You Got Here

Why So Many Graduates Are Stuck

Tuition has more than doubled in the past two decades while starting wages have barely moved. Graduates leave school with $25,000 to $80,000 in combined government and private student debt — and a six-month grace period that ends before most have found stable work.

Underemployment, gig work, and rising rent eat up whatever's left after the minimum payments. Borrowers who fall behind on private student debt usually pile credit cards on top just to stay current on the government loan — and the snowball begins.

By the time most clients reach us, the original loans have grown by 20% or more in interest and fees. The good news: there is a path out, and it gets easier every year you've been out of school.

Balance Owing
$38,400 → $0
Year 1Year 8Year 15
9 - 15 years to repay
A degree shouldn't mean a over a decade of debt
The average Ontario graduate carries student debt for 9 to 15 years after leaving school — interest adds tens of thousands over that span.
Your Options

How to Resolve Student Loan Debt

There are four main paths. Which one is right depends on how long you've been out of school and the mix of government vs. private debt.

1
Repayment Assistance Plan (RAP)
A federal program that reduces or pauses your monthly OSAP and Canada Student Loan payments based on your income. The principal isn't reduced, but interest is paused while you qualify. Best for borrowers earning low to modest income who can wait out the seven-year clock.
2
Debt Consolidation Loan
Roll private student debt — credit cards, lines of credit — into a single bank loan at a lower rate. Government student loans usually can't be consolidated through a regular bank, and you need decent credit to qualify. Helps simplify, but doesn't reduce what you owe. Probably not a great option, since student loans usually have lower rates than most bank credit cards and lines of credit.
3
Hardship Application (after 5 years)
Once five years have passed since your last day as a student, the court can approve early discharge of government student loans through a Consumer Proposal or Bankruptcy if you can show you've made good-faith efforts to repay and continued payment would cause financial hardship.
4
Consumer Proposal or BankruptcyMost Effective
After the seven-year mark, government loans are fully dischargeable. Also, other unsecured debts — credit cards, lines of credit, payday loans — can be reduced or eliminated at any time, with no waiting period. The moment you file, garnishments and CRA offsets stop, interest stops, and everything is rolled into one affordable monthly payment.

Stop Carrying Your Student Debt Alone

Schedule your free, confidential, no-obligation consultation today. In 30 minutes, we'll review wherever you are on the seven-year clock.

Book My Free Consultation →
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Common Questions

Student Loans Frequently Asked Questions

Quick answers to what we hear most from graduates struggling withOSAP, Canada Student Loans, and student lines of credit.

Q
Can student loan debt be included in a Consumer Proposal or Bankruptcy?
Yes — with one important condition. Government student loans (OSAP and Canada Student Loans) can only be discharged once it has been at least seven years since you ceased to be a full or part-time student. Private student debt — lines of credit, credit cards, family loans — can be reduced or eliminated at any time.
Q
What is the seven-year rule, exactly?
Under Section 178(1)(g) of the Bankruptcy and Insolvency Act, government-issued student loans survive a Consumer Proposal or Bankruptcy unless the filing happens seven or more years after your last day as a student. Re-enrolling — even part-time — restarts the clock.
Q
What if I'm not at the seven-year mark yet?
You still have options. After five years, you can apply to the court for a hardship discharge. Private student debt can be dealt with right away. And the federal Repayment Assistance Plan can reduce or pause government payments based on income while you wait.
Q
Will filing stop wage garnishments and refund offsets?
Yes — immediately. A federal stay of proceedings takes effect the day you file, ending wage garnishments, releasing frozen accounts, and stopping CRA from offsetting future tax refunds and GST credits.
Q
What about my student line of credit from the bank?
Bank-issued student lines of credit are private unsecured debt. The seven-year rule does not apply. They can be reduced or eliminated through a Consumer Proposal or Bankruptcy at any point, and rolled together with credit cards, payday loans, and other unsecured debt.
Q
Does going back to school restart the seven-year clock?
Yes. Any period as a full or part-time student — including a short certificate program — resets the clock. The seven years runs from your last day enrolled, not your first. We help clients map this out exactly so the timing of a filing is right.
Q
How much can my student debt be reduced?
It depends on your income, assets, and the mix of government vs. private debt. In a Consumer Proposal, eligible debt is often reduced by up to 80% — repaid as a fraction of what's owed over up to five years, interest-free. We'll model your numbers in the free consultation.