New Student Loans Bankruptcy Rules Unexpectedly Passed by Parliament
In a stunning shocker, on December 13, 2007 The Senate of Canada gave third and final reading to Bill C-12 (which contains the new student loan bankruptcy rules). The Bill has now passed both the House of Commons and the Senate, so the Bill is now law. The next step is Royal Assent, which is a mere formality, and is expected to happen any day now.
Why am I surprised by these developments? Simply put, the Senate Standing Committee on Banking, Trade and Commerce for years has been saying that they want to review the legislation in detail before passing it. They had scheduled hearings after the Christmas break in February and March, 2008; over 20 more witnesses were expected to appear.
And yet, on Thursday, they decided to skip the hearings, skip the discussion, and simply pass the Bill.
This is great news for former students who want immediate relief, since if the new rules take effect early in 2008 former students with student loans who have been out of school for more than seven years will now be able to have their student loans automatically discharged in a bankruptcy. (You can read the full rules in my previous post on the new student loans in bankruptcy rules).
Of course if the Senate had actually studied the Bill it is possible that they would have recommended a shorter time frame, perhaps even a two year rule, but at this point, after waiting this long, some change is better than nothing.
When will Royal Assent happen? No one knows, but keep watching this space; as soon as we know, it will be posted here.
If you have student loans that you are unable to pay, and if you are considering a consumer proposal or personal bankruptcy in Canada, I strongly recommend that you contact a trustee to review your situation now, so that you are ready when the new rules receive Royal Assent.
