How Can a 67-Year-Old with a Monthly Income of $800 Manage a $39,000 School Debt in Canada?

Question from Line, How Can a 67-Year-Old with a Monthly Income of $800 Manage a $39,000 School Debt in Canada?

Answer from AI:

Managing a large debt, such as a $39,000 school debt, on a limited income can be challenging. However, there are several options available in Canada that may help you manage your debt. It’s important to remember that everyone’s situation is unique, and what works for one person may not work for another. Therefore, it’s always a good idea to consult with a financial advisor or legal professional for personalized advice.

1. Repayment Assistance Plan (RAP)

The Government of Canada offers a Repayment Assistance Plan (RAP) for individuals having trouble paying their student loans. Under this plan, you may qualify for reduced monthly payments or no monthly payments at all, depending on your financial situation.

2. Revision of Terms

You can request a revision of terms to extend the time you have to repay your loan, up to a maximum of 174 months. This will lower your monthly payments but increase the amount of interest you pay over time.

3. Debt Consolidation

Debt consolidation involves combining all your debts into one. This could potentially lower your monthly payments and make it easier to manage your debt.

4. Bankruptcy or Consumer Proposal

In extreme cases, you may consider filing for bankruptcy or making a consumer proposal. Both options will have serious implications for your credit, so they should only be considered as a last resort. Note that student loans are only discharged in bankruptcy if you have ceased to be a student for at least seven years.

5. Seek Professional Advice

It’s always a good idea to seek professional advice when dealing with large amounts of debt. A credit counsellor, financial advisor, or legal professional can help you understand your options and make a plan to manage your debt.

Remember, it’s important to take action as soon as possible. Ignoring your debt won’t make it go away, and could lead to more serious consequences down the line. It’s also important to know your rights as a debtor. For example, in Canada, it’s illegal for a debt collector to harass you or use abusive language.

Please note: This information is intended to provide a general overview of options available for managing school debt in Canada. It is not intended as legal advice. Laws and regulations can change, and each individual’s situation is unique. Therefore, it’s always a good idea to consult with a legal professional for personalized advice.