Under Canadian law, a former student who falls behind on student loan payments can have their wages garnished to make up for these payments. To begin wage garnishment, a judgment must be in place and there are some minimum standards that the borrower must meet. The maximum amount of wages that can be garnished is 15 percent. The minimum income requirement for the borrower to make is between 220 and 240 Canadian Dollars per week. Anyone making less than this cannot have their wages garnished.
Bankruptcy can be used in certain circumstances to discharge student loans under Canadian law. Declaring bankruptcy does not discharge loans in every situation. The student loan laws have changed drastically in Canada in the 1990s and 2000s. All student loans used to be forgiven with any bankruptcy, but the law was changed and required the borrower to be out of school for 10 full years before loans would be forgiven. In 2010 this law was amended again and changed to seven years.
As of 2010 the seven year rule applies to student debt and bankruptcy. Anyone declaring bankruptcy will only have student loans forgiven if that person has "ceased to be a student" for a minimum of seven years. This is seven years from the last day the student was enrolled in classes, not seven years from when the loan was dispersed. If bankruptcy is declared before a full seven years, then the student loans won't be forgiven.