By Tamsin McMahon
Students worried about waiting 10 years to declare bankruptcy after graduation now have reason for hope.
New Democratic Party MP Libby Davis introduced a private member’s bill in Parliament last week asking the government to repeal changes made to the Bankruptcy and Insolvency Act, which were passed in the federal budget earlier this year.
Under the revised act, recent graduates who want to declare bankruptcy on their student loans must wait 10 years. Before students only had a two-year wait.
“I was really appalled by [the changes],” said Davis, who introduced bill C-349 Oct. 8. “It was really very hypocritical of the government.
“To me it was nothing more than [Finance Minister Paul] Martin bending over backwards for the banks,” who will lose less money if students have a longer wait to default on loans.
Davis’ bill follows the announcement of a planned Charter challenge by the Canadian Federation of Students, who call the changes to the Bankruptcy Act discriminatory.
Davis said she is asking the act be revise because it hits some of the most vulnerable members of society: graduates fresh out of school who are looking for work while paying back loans.
“It almost wipes out their ability to declare bankruptcy,” she said.
Ryerson student Pattie Ghamami agrees. The fourth-year nutrition student is unsure she can keep up with her estimated $18,000 in loan payments when she graduates.
“I think [the revised act] is ridiculous,” she said. “Especially considering the way they make you pay the loans back. A lot of people can’t pay [the required amount] every month.”
Ryerson’s Financial Aid and Awards officer Karen Takenaka estimates 50 to 60 per cent of Ryerson students have some form of student loan.
It’s because so many students depend on loans that Davis hopes the bill will pass.
While she said it has growing support, most private member’s bills never see the light of day. Of 200 private member’s bills introduced in Parliament in 1996, 56 per cent were considered votable and only two became laws.
But Elizabeth Carlyle, national CFS representative, hopes the proposed bill starts debate in parliament about CFS’ Charter challenger, which the lobby group plans to file in November.
Carlyle said she is meeting with Martin in late November. “[The meeting] will be a major determinant in our own course of action.”