Help with friends student loan predicament (Canadian)

[Senor Spondulicks Stubble]

Howdy all,

With me now spouting all this frugal lifestyle stuff, a buddy of mine would like to get in on the action but has the lingering shadow of an unpaid student loan over his shoulder. 

Here's the deal:  He was living with his parents after college (unemployed) and was getting the relentless collection calls & letters for years.  He moved out (was in the wind for a while - the letters and calls stopped at the family home) got a real job and would like to come clean and pay the loan off.  What he's concerned about is that he hasn't filed a tax return in years, has no idea what is owing on the loan and is afraid to stick his neck out in case the relentless calls & letters start up again at his new place.

Does anyone know how to go about sorting something like this out without suffering the mighty wrath of OSAP and/or the Provincial & Federal Governments?  One thing he mentioned is that as the years went by the collections people would reduce the amount required to clear up the loan.  He's not a doctor or lawyer so it's not like it was a massive loan.

I was fortunate enough to not require a loan or grant to go through college so I have no idea where to start here.

Any ideas would be greatly appreciated.

Thanks,

Senor Spondulicks Stubble

[peterpatch]

Hi Senor,

I have a canadian student loan (OSAP) and I was also unemployed in the past while the loan payments were due. OSAP has a repayment assistance program available to people who cannot pay the loan and I was able to use it because I had no job. I am very surprised your friend isn't being provided at least interest relief through this program (https://osap.gov.on.ca/OSAPPortal/en/A-ZListofAid/PRD003208.html)

Here is a link to an online forum full of people with similar situations, I am sure it will help lead your friend to answers. http://www.canadastudentdebt.ca/forum_posts.asp?TID=4854&title=help-with-osap-collection-agency


Also I hope your friend qualified as someone who didn't have to file a tax return (http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/flng-blgtns/menu-eng.html. Otherwise he should immediately take action to remedy the situation or he could face more serious penalties then if the CRA comes after him.

[KimAB]

He needs to find out who he owes and how much.  And if he owes the Government he should pay them first.  Some of those bills there were in collections might have been written off.  If they have been written off he should get it in writing because sometimes they still try to get you to pay even if you've settled with them.  They depend on you being disorganized enough to pay anyone who asks because you don't know who you owe.

The student loan people are the most forgiving of all of the people you can owe money to, imo.  He should have been working with them and not hiding, but it's done now.  He'll feel a lot better when he gets some payment plans in place and starts working on it! :-)

[GuitarStv]

If your friend owes the Canadian government and they find out, they have the power to take the money owed directly out of his bank account and charge him a service fee for the privilege.  Best to pay them first.

[Gerard]

I'll just underline what other people are saying -- assuming he earned enough to owe taxes, not filing returns is probably going to be a bigger problem than the student loan. There's a voluntary disclosure programme that might help (http://www.cra-arc.gc.ca/gncy/nvstgtns/vdp-eng.html), but there's no guarantee that they're going to be fair or nice... which is why a whole bunch of (shady-looking) tax amnesty advisors have sprung up.