Can I get OSAP if I file for bankruptcy?
When weighing your options to deal with your debt, its important to consider the implications of your potential decision. Many debtors seek the help of a Licensed Insolvency Trustee to get a fresh start, and that fresh start often involves more education to increase their income and overall financial stability.
As such, we’re happy to provide the following synopsis of OSAP’s eligibility criteria as it relates to bankruptcy and consumer proposals below. You can find the application instructions in their entirety here.
The following questions appear on the 2024-2025 OSAP application form.
Q #610: Have you ever filed for bankruptcy or initiated a related event?
Note: A Consumer Proposal is a “related event”
Q #611: Is your bankruptcy discharged?
Q #612: What’s the date you filed bankruptcy or initiated related event?
Q #613: Have you ever filed any other bankruptcies or related events?
If you file a bankruptcy or consumer proposal FIRST, and THEN apply for OSAP you must provide OSAP with:
- A letter from your Trustee indicating that neither the Government of Canada or the Province of Ontario, as a result of financial assistance given to you through OSAP and/or the Ontario Learn and Stay Grant, are a creditor in your bankruptcy or consumer proposal; and
- None of the OSAP funding that you receive will be seized to repay any creditors.
You must also report all previous bankruptcies or related events that you may have filed in the past.
Assuming that you’re applying for OSAP funding and have never borrowed from OSAP or received the Ontario Learn and Stay Grant, then you should be fine. Alternatively, if you have already repaid previous OSAP loans or grants in full, then you’re also fine.
If you have previously negotiated student loans through a consumer proposal or bankruptcy after May 11, 2004 then you must provide proof that these loans have been discharged or paid in full.
If OSAP is a creditor in your current bankruptcy or consumer proposal with respect to loans received to fund previous studies, then you likely will not be eligible for additional OSAP loans for a new program of study.
If you borrow from OSAP and begin studying FIRST, and THEN file a consumer proposal or bankruptcy you must provide OSAP with:
A letter from your school’s Financial Aid Office or Registrar’s Office which confirms the following information:
- You were enrolled in an approved program on a full-time basis at an approved school when you filed your assignment in bankruptcy or consumer proposal;
- You continue to be enrolled in the same approved program of study in which you were enrolled at the time that you filed your bankruptcy or consumer proposal; and
- You have not had a break in studies of longer than six months since the date your filed your bankruptcy or consumer proposal
Basically, if you already have taken student loans you either have to:
- Have paid them
- Discharged them through a past bankruptcy or proposal at least 3 years ago; or
- Stay in the same program, at the same school, on a full-time basis, without a break in studies of more than six months.
In other words, OSAP will continue to provide assistance to help you finish a program that you’ve already started in most cases, but won’t provide financing for a new program until the existing student loans have been paid or it’s been some time (3 years) since they were discharged.
If you answer “Yes” to both questions #610 & #611 meaning that you have been discharged from bankruptcy or completed your consumer proposal, then you must simply provide a copy of your bankruptcy search results. You can obtain a copy of these results by visiting this site, searching your name, and paying $8.00 to the Office of the Superintendent of Bankruptcy.
Conclusion
It is possible to have your application for OSAP approved even after filing for bankruptcy or making a consumer proposal. That said, the criteria are specific and it is important to understand them so that you can weigh your options accordingly.
The information above presents a synopsis of the 2024-2025 OSAP eligibility criteria as it relates to bankruptcy and insolvency. Student loan eligibility criteria changes regularly, and Steve Welker and Company is not an expert on the eligibility criteria for student loans. If you remain concerned about your eligibility for OSAP, we recommend contacting your financial aid office directly.
To discuss your situation with a Licensed Insolvency Trustee, give us a call, or fill out our form. We’d be happy to review your circumstances and explain your options for free. Let us impress you with a prompt response.