Congratulations on graduating, it’s a major achievement! But the last thing you should have to worry about post-graduation is debt.
However, you may be rightfully concerned about your debt while applying to get a post-graduate work permit (PGWP). It is something you must apply to very shortly after completing your studies to stay in Canada. We’ve worked with many Canadian immigrants to help prevent debt from disrupting their life in Canada. We are often asked by our clients whether debt can affect their ability to study, work, and live in Canada.
If you’re concerned about how debt could affect your PGWP application, keep reading. We’ll be answering commonly asked questions and sharing some debt relief options that can make repaying debt easier.
Does this article not have what you’re looking for? You can find more debt relief resources for immigrants in Canada here:
- I’m an International Student in Debt in Canada: What Do I Do?
- Debt Relief Options for Canadian Immigrants: A Full Guide
- Will a Consumer Proposal Affect My PR Application in Canada?
What is a Post-Graduate Work Permit?
A Post-Graduate Work Permit (PGWP) is an official document that allows international students who have completed their studies at a designated learning institution (DLI) in Canada to work in the country.
- Eligibility: Graduates from programs that are at least eight months long can apply. This includes degrees, diplomas, and certificates.
- Duration: The length of the PGWP depends on the length of the program you completed. If you studied for two years, for instance, you might be eligible for a PGWP that lasts for up to three years.
- Open Work Permit: The PGWP is an open work permit, meaning you can work for any employer in Canada and are not confined to a specific job.
Having a PGWP is valuable as it allows you to gain work experience in your field, which can help you apply for permanent residency later on.
Does Debt Affect Your Post-Graduate Work Permit?
No, debt should not affect your ability to get a PGWP in Canada. Immigration, Refugees and Citizenship Canada (IRCC) will not check your credit score or your financial status when applying for a PGWP.
Does My Post-Graduate Work Permit Application Require Proof of Funds?
No, applying for PGWP does not require you to show proof of funds. This means your financial stability shouldn’t affect your ability to qualify for a PGWP in Canada.
Some PGWP applicants will add proof of funds to strengthen their application. Some say proof of funds has helped their application get accepted sooner.
However, we can’t guarantee that proof of funds will have an effect on your PGWP application. The IRCC has never claimed that proof of funds will help strengthen your PGWP application. Proof of funds is ultimately not required to be accepted.
Proof of funds may, however, be required for other immigration applications.
Your Debt Will Follow You If You Stay in Canada
If you choose to stay in Canada after graduation, your debt will continue to follow you. This shouldn’t affect your citizenship status, but it will affect other parts of your life in Canada.
- Your debt and poor credit score will affect your ability to rent or qualify for a mortgage.
- Not repaying the debt will lead to collection calls and collection actions taken against you. This could include wage garnishment (money deducted from your paycheque to repay your debts) or seizure of your assets (car, home.etc).
- Having a poor credit score can affect your ability to take out loans in the future if you need them.
- Some employers check credit scores, especially for financial roles. A poor score can impact your job applications if you’re seeking a position in finance or similar industries.
- Debt causes significant stress. This stress can impact your job search and performance in interviews, leading to difficulties in finding employment.
It’s important to start figuring out your financial situation, especially if you plan to stay in Canada for the foreseeable future.
Building Financial Stability in Canada
Even if your debts feel too high to manage, there’s still hope. Many people in Canada struggle with high debt, which is why there are debt relief options that make eliminating debts easier.
If you have debts you can no longer manage (meaning you no longer are able to make regular payments), consider these debt relief options:
Debt Consolidation Loans
Debt consolidation loans involve taking out a new loan to pay off multiple existing debts. This process allows you to combine several payments into one single monthly payment, typically at a lower interest rate. This should make it easier to pay off the loan over a set period of time, since the debt amount won’t grow as quickly from interest.
Want to learn more about debt consolidation loans? Book a free, no-obligation consultation with a debt relief specialist to learn more.
Consumer Proposal
A consumer proposal is a formal agreement between you and your creditors that allows you to pay off a portion of your debt over a set period, usually up to five years. This option can reduce the amount you have to pay overall, allowing you to settle your debts quicker. However, it will have an impact on your credit score.
Want to know if you’re eligible for a consumer proposal? Book a free, no-obligation consultation with a debt relief specialist to learn more.
Bankruptcy
Bankruptcy is a legal process that can help individuals eliminate most of their debts. People usually turn to bankruptcy for a fresh start, but it has severe consequences on your credit. It will remain on your credit report for several years. Regardless, it can still discharge you from most of your debts. It should be considered a last resort if no other option is available.
Speak to a debt specialist about how bankruptcy works and if it’s right for you today.
