They’re always running around in the back of my mind, reminding me that this month’s payment is swiftly approaching, regardless of what my bank account looks like. It's stressful, to say the least, and can easily develop into a state of constant anxiety. And right now, I can't afford my student loans, so that anxiety has escalated to the next level.
Jessica Buck is typical of many of the people we work with. A large student loan debt ruining her life and relationships. Student loan debt is constantly on her mind:
Ms Buck's problem is US student loan debt, but the effect on many NZ student loan debtors is the same. Having a student loan debt can easily cause anxiety, depression, and loss of quality of life. The sooner you deal with it the better.
The IRD states that it could take more serious actions against overseas debtors than it currently is, including applying for garnishee orders on overseas income, initiating bankruptcy procedures in an overseas court or continuing with their arrest warrant processes if the borrower crosses the New Zealand border. If you have an overseas debt that is out of control, these IRD indications should cause you to immediately deal with your debt as the possibility of being bankrupt overseas or having a garnishee order against overseas income is scary news for many people.
Currently when overseas debtors become bankrupt in NZ, to get rid of the student loan debt, the IRD does not take proceedings to also make them bankrupt overseas, meaning that their overseas credit rating remains largely unaffected (in most cases). The indication that the IRD is considering overseas bankruptcies is a game changer and would have a huge impact on an overseas resident debtor. The message is that if your debt is not under control, that the sooner you deal with it the safer you are likely to be from an escalation of IRD enforcement action.
"Student loan lending does not lead to good employment or income outcomes for some individuals, or for taxpayers who make a significant contribution to tertiary costs." (Ministry of Education report)
25% Discount Offer (more details below):
If you are ready to get your student loan debt sorted, we have some extra special assistance offers for you during March. We are offering discounts of around 25% for new advice and bankruptcy clients. If you are an existing client, and recommend someone as a new client for us, we will give them an extra discount to thank you for your business.
We offer a fast turn around and guaranteed results (some conditions apply).
This offer is available only for new business accepted before 31 March 2019.
Please contact us now if you want to get your debt sorted and receive expert assistance at a great price. To get started please email: email@example.com
New Zealand bankruptcy gets rid of New Zealand student loan debt. In most cases bankruptcy lasts for three years.
When you apply for bankruptcy you declare your income, debts and assets etc.
In most cases there will be a flurry of communications with the Official Assignee's representatives at the time of applying for bankruptcy, and in the few weeks thereafter. Some people never hear anything further but it is important to remember that the bankruptcy rules still apply. This includes things like advising the OA if your circumstances change and being aware that the OA may claim assets that you acquire during the bankruptcy. So, if for example, you saved up some money during the bankruptcy that money could be seized by the OA. If they found out about it after your discharge there would still be risk.
Recently we have noticed a flurry of communications from the OA to people who have been bankrupt for some time. The OA is seeking detailed information about the bankrupt's current circumstances. If you receive such a letter it is very important that you reply accurately, and on time. Our consistent experience with the OA is one of professionalism and reasonable flexibility, however, they do not tolerate misleading information or the failure to adhere to deadlines. If you cannot keep to a deadline it is important that you seek a formal extension before the deadline date (which will probably be granted if the request is reasonable). If you have any concerns about your information we can help you with the issues and by negotiating with the OA if there are issues.
There's no better feeling than being able to get a great resolution for a client. In this case we negotiated a successful resolution with the IRD, including a hardship application. We commenced acting in late 2018. The client needed additional time to get some of his documents together and the IRD were helpful in allowing an extension of time until early January. Within one day of the additional documents being provided to the IRD, the application was approved. In some cases negotiations can take much longer, but this is an example of what is possible. Our client asked to provide a reference and this is what he had to say:
Student loan debt burdens are common across the English speaking world, but in Kentucky they've come up with a solution to encourage teachers to become more highly skilled while having their student loans forgiven.
In Auckland many teachers can't afford to live because of sky high property prices, and modest pay rates. The thought of having to take on more debt to improve qualifications is unlikely to make sense. Perhaps our country should be looking at best practices internationally to ensure optimal access to a quality education that benefits not just the student, but the community.
If you haven't yet dealt with your student loan debt issues, now is the time to do so so that you don't spend the rest of the year worrying about it. If you live overseas, your debt is large, and you have no assets, a New Zealand bankruptcy may be the most effective way to deal with the problem.
We provide a 100% guarantee on bankruptcy applications being successful (providing you provide all necessary information). You can become bankrupt in as little as 2-3 weeks of starting the process (or longer if you prefer).
The IRD has wide ranging powers to obtain the details of student loan debtors who live in Australia. The ATO is empowered to provide the IRD with any of the following details:
Every year, after Christmas or Easter, we are contacted by many student loan debtors who don't understand how the IRD has obtained their details after they have visited family in New Zealand. The IRD has an information sharing agreement with the Customs Department and the IRD is provided with a list of information, including:
The person's arrival card information including the:
Student loan debtors are legally required to keep the IRD updated on their contact details but often this is overlooked. If you are contacted by the IRD, shortly after a visit home, this is how they have probably obtained your details.
Black Friday Special: 30% off all new advice and services booked before 5 pm on 30 November 2018 (NZ time). Not available with other offers or discounts. Please contact us now if you need help.
We are offering substantial discounts off our normal fees for assisting with bankruptcies or IRD negotiations, if you proceed during November. We want to help as many people as possible to have a stress free Christmas knowing that their student loan debt has been resolved.
Please contact us directly for details.
There's still time to get your debt problem sorted before Christmas but you need to start now, or very soon. If you are travelling home to New Zealand for the holidays the IRD will receive your contact details and they may even aggressively contact you before you have left the country. You can avoid this by dealing with it now.
We have had two reports today of student loan borrowers being given wrong information by the IRD. In the first example, we are told that the IRD stated that a student loan debt of more than $40,000 was "too low" for a bankruptcy application. This is wrong. If your debt is more than $1,000 you can apply for bankruptcy.
In the second example, we are told that the IRD officer advised that you have to be living in New Zealand to apply for NZ bankruptcy. Wrong again. We have never had any difficulty in processing NZ bankruptcy applications for our clients and they live all over the world.
It is not in the IRD's interests that student loan borrowers seek the protection of bankruptcy, however, we hope this isn't a reason for giving wrong advice.
We have been doing this work for so long, and worked for so many people, that we often receive feedback from people who have come out of bankruptcy after three years and who have been able to start wonderful new lives, free from the stress of student loan debt. It is special to be able to help people through what might otherwise be a stressful and frightening life event. Recently we received unsolicited testimonials from clients who had been, or were about to be discharged:
Because of Kristina's help, I am now automatically discharged from my bankruptcy ! Three years ago I had a hefty amount of student loans with the interest steadily increasing. I was (and still am) living overseas and didn't know where to begin. I begin researching online and came across the studentloan.org.nz website. The fees were affordable, the website showed steps to bankruptcy as well as the choices that are available so I contacted Kristina and asked for her help. I found Kristina to be extremely knowledgeable, understanding and knew exactly what options were available to me and where to start. If I had questions she was able to answer each one. She was also able to help me file the necessary paperwork to travel back to New Zealand for my mother's funeral. From the very beginning to the end Kristina made the whole process of a bankruptcy a lot less scary than I had anticipated. My stress was kept to a minimum due to Kristina's expertise and service. I'm so glad I made the decision to use Kristina's services !! I would thoroughly recommend her to anyone thinking about declaring bankruptcy. Thank you Kristina !!! Thanks again for everything ! All the best supporting others in their financial concerns !
I really appreciate your knowledge and services through this period. It has been life changing.
This week I received an email with a letter confirming my release from bankruptcy. I would like to sincerely thank you for your help during the process. I am very grateful as it was a stressful and challenging time. Best of luck supporting others in financial trouble. I believe you are providing an excellent service and are making a difference in peoples lives. Regards,
My time as a bankrupt is nearly completed which is great. I want to thank you again for everything that has helped relieve a lot of anxiety and stress.
Our student loan blog has been chosen as being in the top 40 worldwide, out of thousands of student loan blogs. We appreciate the recognition for the work that we do to educate and assist.
We don't want anyone's Christmas ruined by a student loan debt problem. We know that money is tight for many of you, and especially at this time of year. As a a special pre-Christmas gift, we are offering advice, bankruptcy assistance, and IRD negotiation assistance, at a negotiated affordable price. Assistance will be provided very promptly.
Simply contact us and let us know what you need, and what you can afford for advice or assistance. We will do our best to agree an affordable price that works. Please note that this offer is available until 15 November 2018.
If you start now there is still time to get your student loan debt problem resolved before Christmas (in most cases). Getting it resolved will mean no risk of arrest at the border, or of having your Christmas holiday plans destroyed by debt collectors.
Please contact us if you need prompt help to understand your options or to get a resolution underway.
The Answer: A part finished degree with a student loan debt.
Figures released this week show that 36% of bachelor degree students do not complete their degree. Some students find that the quality of the degree, or teaching institution, is not worth spending more time and money on, others find that tertiary education is not for them. For some it is the realisation that the jobs will not be there for them when they graduate. Lachlan Maclean, a biology and computer science student stated that:
"It's a lot of money to be going to university. There's really no point continuing, doing three more years, if you're going to get a mediocre job out of it."
Our view is that the system is deeply flawed. Nevertheless, we have what we have, for now. Our advice to people thinking about spending tens of thousands of dollars on tertiary education is to be sure that this is what you want, to be sure that the cost is going to be worth the anticipated future return, and that the quality is acceptable.
We are often asked what is the "ball park" amount that the IRD will write off if you offer to pay off your student loan debt. The answer is that there is no ball park, and the likely write off varies from case to case. Some of the relevant factors include the break down of the debt, how much you are offering to pay, how the offer is being funded, your personal circumstances, and why the debt got behind.
In some cases significant write offs are possible, but it will depend on the circumstances.
The IRD is supposed to respond to communications within 10 working days, in most cases. You would think that getting things resolved quickly would be good for business. We have had many clients who say that even though the IRD knew their contact details, they received no information about their debt for many years. During the time that the IRD made no contact, enormous interest was added to the debt. Another example is a case, we know of, where contact was made with the IRD, in March, to try to resolve the student loan debt. It is now 7 months later and the IRD has still not provided a real response. Of course, interest has continued to build.
Often clients have told us that they believe that the IRD's delays are deliberate so that more interest can be charged. We were sceptical, but this year we have seen a deterioration in IRD time frames and then we came across this information.
In the 2016/17 year, interest of $120 million was charged, and penalties of $72 million. Total ordinary and penalty interest for one year was $192 million, or $526,027 every single day. Every day that resolution is delayed, the IRD is potentially better off by more than $500,000. Naturally, this amount is spread over a large number of cases, and the longer the delay the greater the chance that the IRD receives zero because the borrower becomes bankrupt or dies, but these figures show that there is a huge benefit to the IRD in delay.
Once again, student loan borrowers are facing shabby, discriminatory treatment. The Government has announced tough new measures to deal with loan sharks. Many people, that we work with, feel that the IRD is the worst loan shark around.
Prime Minister Jacinda Ardern and Commerce and Consumer Affairs Minister Kris Faafoi say that new laws are needed because:
“This Government is committed to making New Zealand the best place to raise a child...to do that we must stop families becoming trapped in the appalling debt spirals and poverty that result from onerous lending and payback terms...These new measures will halt the very worst of those preying on vulnerable and desperate people while enabling borrowing that meets their needs in an affordable way... They will protect families through capping the total interest and fees charged loans, introducing tougher penalties for irresponsible lending
Interest and fees on high-cost loans will be limited to 100% of the amount borrowed (the loan principal). For example, if an individual borrows $500, they will never have to pay the lender back more than $1000, including all fees and interest.
Lenders will have to be responsible, they will face penalties if they misbehave, borrowing costs will be transparent, and there will be access to help during the debt collection process. Shouldn't student loan borrowers also have those protections? Don't they also deserve to be protected from a spiral of debt and poverty? Shouldn't their children also matter? Why are they not protected from irresponsible lending?
We have many student loan borrower clients where the amount demanded by the New Zealand government/IRD is more than 7 times the amount borrowed, not the maximum of double referred to in this legislation. Shouldn't the government have to abide by the same standards as other lenders? Failing to so drives many borrowers to the brink of despair, and the relief of bankruptcy, things that could have been avoided if they were treated with compassion.
Recently we experienced an IRD officer who refused to provide information about a client account to which we (and the client) were legally entitled. In this case it was information about penalty interest.
It is rare that the IRD can withhold information about your debt, including the original loan contracts and charges (note that, in some cases, this information is held by Study Link). Normally the IRD respects its disclosure obligations but there are times when people have to deal with someone who makes things difficult. If this happens to you, we can help, or you can make a formal demand for your information under the Privacy Act and the Official Information Act, make a formal complaint against the IRD, or ask the Ombudsman to help you.
Don't let the process get you down. You do have rights and you also have the right to have your rights honoured.