The Canadian Association of Insolvency and Restructuring Professionals (“CAIRP”) has been granted intervener status in the Supreme Court’s upcoming hearing of the appeal in Izabela Piekut v. His Majesty the King in Right of Canada as Represented by the Minister of National Revenue.

For the second time in a year, the Supreme Court is addressing debts that survive bankruptcy under section 178(1) of the Bankruptcy and Insolvency Act.

Section 178(1)(g) exempts government student loans from discharge for seven years after the date on which the bankrupt ceases to be a full- or a part-time student. On November 5, 2024, the Supreme Court will consider how this seven-year non-dischargeability period should be calculated.

Courts diverge on whether the date that the bankrupt ceased to be a full- or part-time student is specific to the student loan at issue (the “Multiple Date Approach”) or whether the date for all of a bankrupt’s student loans is the most recent time they ceased to be a student (the “Single Date Approach”).

The Multiple Date Approach and the Single Date Approach differ in how they treat students who have received two or more student loans to fund different programs (or the same program at different times). In such cases, some loans may be more than seven years old and some less than seven years old. The Multiple Date Approach, by treating each loan individually, discharges the older loans while preserving the non-dischargeability of the newer loans. The Single Date Approach, conversely, makes every loan non-dischargeable by using the last date on which the student ended their studies to calculate the seven-year window for all loans.

CAIRP argues that the Court should adopt the Multiple Date Approach because this interpretation aligns with the text of the BIA, student loan legislation, and the Supreme Court’s direction in Poonian that the section 178(1) exceptions must be interpreted narrowly and apply only in clear cases. 

CAIRP and the other parties’ materials can be found HERE.