For a lot of people, student loans are necessary in order to attend post-secondary education. Student loan debt is often seen as “good debt” since it is taken out in order to get an education which will likely help you get a better paying job and lead to a more successful career. In many cases, this is true. Student loans make it possible to receive the training you need to get a better job. However, they are still very expensive to repay. The average Canadian with student loan debt leaves school owing $27,000. This is obviously a large amount of money that takes quite a long time to repay. On average, it takes about 14 years for students to pay off their student loans. This can have a very serious affect on the rest of their lives. Owing a large amount of money for a very long time makes it difficult to afford other expenses. Recent graduates often have a lot of other expenses in the first few years out of school. They will need to pay for housing and transportation and clothing and food and many other necessities. These costs add up. It’s even been found that student loans cause people to delay other life milestones, such as getting married or having kids. The reality is that repaying student loan debt doesn’t make it easy to afford other expensive life events.
Student Loan Debt Stress
Student loans also cause a great deal of stress and anxiety. A 2015 survey found that 48% of students are worried about paying for school, repaying student debt and affording living expenses. The same survey found that 37% of students are unsure of how they will repay their debts when they graduate. This stress continues after they finish school. Many recent graduates find it tough to manage their expenses and their student loan payments on entry-level salaries. This leads to stress and it can also cause them to take on additional debt. If you are unable to make ends meet and repay your student loans, you may find yourself putting more and more purchases on your credit card. You might use your line of credit more often. You may even take out personal loans or payday loans in order to afford your expenses. Over time, you could wind up with more debt that you can afford to repay. If this sounds like your situation, we can help.
Student Loan Debt Solutions
If you are struggling with debt and unable to make ends meet, a consumer proposal or filing for bankruptcy may be options for you. However, you can only include student loan debt in these processes if you have been out of school completely for at least seven years. This means that you may not be able to eliminate your student loans by filing for bankruptcy or by submitting a consumer proposal. If this is the case, we can help you investigate other student loan debt relief options. However, if your student loans have caused you to take out other debts in order to pay for your expenses, or if you have been out of school for at least seven years, filing a consumer proposal or a bankruptcy may be helpful to you. These legal processes make it possible to reduce or eliminate the amount of debt that you owe.
Filing a consumer proposal
With a consumer proposal, you make a legal offer to your creditors to repay them on terms that you can afford. In most cases, this involves paying a portion of the debt that you owe in monthly payments for a specific period of time. Once the proposal is complete, the remaining debt is eliminated. A consumer proposal allows you to repay some of what you owe without having to repay the whole amount.
Filing for bankruptcy
In most cases, bankruptcy is the last option considered for debt relief. However, it is still an option for many people. Bankruptcy allows you to eliminate most (if not all) of your debts and start fresh. It makes it possible for you to end up in a position where you can begin to rebuild your financial life. Speaking with a licensed trustee can help you understand if these processes will be helpful to you. A trustee can review your situation and provide you with details on the options that are available. This initial consultation is offered at no cost. If you need help with your student loans and paying down debt, please contact us for more information.