We are regularly contacted by student loan borrowers who have been told, by people who should know better, that bankruptcy does not get rid of student loans. 

Unfortunately there are a lot of people who do not understand the difference between bankruptcy and the no asset procedure. The no asset procedure is for people who have debts under $40,000 and it only lasts for one year, but it is NOT for people who have student loan debts. The no asset procedure will not get rid of any of your student loan debt. Only bankruptcy will do this. Please contact us if you have any questions.

Most overseas based student loan borrowers have to pay interest on their student loans. Most New Zealand based borrowers do not. The interest charged to overseas based borrowers often causes the total debt to spiral out of control. We know of many cases where someone has started with a small student loan debt of, say, $10,000, they hear nothing from the IRD for many years, and then suddenly they receive a demand for more than $100,000.

There is a huge benefit to not having interest accruing on your loan. Did you know that some overseas based borrowers are able to be treated as if they were New Zealand based? This means that they get the benefit of no interest even though they live overseas. If any of the following situations applies to you, you may be eligible to be treated as being New Zealand based even though you live overseas:

• You are working overseas for the New Zealand government.
  
• You are working overseas as a volunteer, or for token payment, for a charity.
  
• The reason why you are overseas is because of an unexpected delay or an unplanned personal absence.
  
• You have to be overseas because of your employment or occupation.
  
• You are overseas because you have accompanied your spouse, civil union partner, or de facto partner overseas.
  
• You are studying overseas.
  
• You are living in Niue, the Cook Islands, Tokelau, or the Ross Dependency.
  
  

Please note that if you satisfy any of the above tests the IRD still has to approve your application, and other criteria need to be satisfied, however, because being approved can make a difference of thousands of dollars to your student loan debt balance we believe that it is worth making an application if there is any possibility that this applies to your situation.

We can advise you on whether you might be eligible to apply for zero interest and we can also make the formal application for you so that you increase the likeligood of success. Please contact us if you have any questions.