Q: I have a federal student loan but can’t pay it back. What’s going to happen?
—Broke in Barrie, Ont.
A: OK, here’s the good news: you automatically get six months grace after graduation before you have to start paying back your Canada Student Loan. Plus, when you receive the payment schedule statement, it includes a form if you need six more months of interest relief. Need more time? Call the government’s Repayment Assistance Program to renegotiate, says Debbie Gillis of K3C Credit Counselling in Kingston, Ont. You can decrease monthly payments and extend the payback period—but the total interest you pay will rise. And now, the bad news: If you exhaust all these options, the government will put a lien against all future income tax returns until the money is paid in full. “If it’s more than seven years from when you were set to start paying, you may have to go into bankruptcy and it might be discharged,” says Gillis.
Got a delicate money question? Send it to email@example.com