Kiwi Blog reports today about growing frustration with the IRD's MyIR computer system. One accountant was quoted as stating that:

"he believed the integrity of the whole tax system was under threat"

Even if these issues haven't affected you, it is a reminder of the benefit of getting things done before the IRD's deadlines, and of keeping copies of everything.

If you are an overseas resident NZ student loan borrower, and you are not on a repayment holiday, you are likely to need to pay half of your annual obligation payment by 30 September. The maximum obligatory payment is NZ$2,500 (assuming you have no arrears). For many people this is a lot of money. In order to avoid budget problems one option is to make regular, smaller payments in advance. For example, if you had $2,500 due, you could instead make 3 x monthly payments of around $833, before the due date, in order to spread the load. If this is still too much, it may be possible to negotiate with the IRD for smaller regular payments to be made so that you are up to date by a future deadline (for example 31 March 2019). 

If you do have any overdue arrears, and they are not under some kind of formal arrangement with the IRD, these must all be dealt with ASAP. Not only are you at great risk if the arrears are not paid, or formally dealt with, if you leave dealing with it until late September the IRD will be very busy, making it more difficult and stressful to get things sorted.

​Please ask us if you have any questions.
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In the past, it was unusual for the Official Assignee to pursue overseas property owned by someone who had become bankrupt in New Zealand. This has changed. The change was gradual at first. The situation now is that if you become bankrupt in New Zealand, and you own a property in certain other countries, that it may be at risk. Not all at risk properties are pursued and this may depend on the amount of equity, which country the property is in, the amount of your debt, degree of cooperation, proposals put forward for dealing with the claim, your circumstances, and the general features of the case. 

In situations where the Official Assignee decides that the bankrupt may be uncooperative or may try to defeat the Official Assignee's potential claim, legal proceedings to pursue the property can be issued in some foreign countries without  prior notice to the bankrupt.

If your debt is much larger than your home equity, you may be willing to take the risk with your home. In some cases, for example, where there is not much equity, or there are difficult personal circumstances, this may increase the likelihood of a mutually agreeable resolution as long as there is a sensible and cooperative strategy for dealing with the Official Assignee. There may also be resolution options that involve payment over time or at a later date.

If you are trying to negotiate with the Official Assignee it is best to have one line of communication, to respond on time to all requests, and to try to be pro active in anticipating their requirements.

We received another lovely testimonial on 11 June, this time from a client who we had successfully negotiated an IRD write off for. She no longer has any student loan debt. Our client had this to say about our work:
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YES! Thank you, that is such a relief. Please feel welcome to use the following in your reviews.

I am so glad I found this service online. You have been nothing but prompt, clear and concise in your communications with me. I have greatly appreciated your assistance over the previous 3 months. After getting
nowhere fast with my interactions with the IRD, through your knowlege and expertise I was so happy to have all of my late penalties deleted, which reduced my loan payout amount by over a third. My balance is now officially $0. Thanks so much!
Thanks N

This morning we received an amazing email from a client who we had been working with for a few years. We provided her with lots of assistance before she made the decision to become bankrupt and then helped her with the bankruptcy process and during the time of the bankruptcy. Our client is now discharged from bankruptcy and free of her debt and the enormous stress that came with it. This is what her email said:

Good morning Kristina,
I am a former client of yours and I am now automatically discharged from my bankruptcy :)  The date of my bankruptcy started June .., 2015 and was completed June .., 2018.

Just wanted to write a testimonial and to thank you for everything !

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 !

The overseas based borrowers unit of the IRD has several times of the year when it is much busier than usual. This includes the run up to the compulsory payment due dates of 30 September and 31 March, and around the times when high numbers of overseas resident New Zealanders travel home, like Easter and Christmas. Right now is not a particularly busy time which means that applications and questions should be able to be dealt with faster.

If you have a student loan debt that is starting to get out of control, or which you are not paying, we recommend that this is dealt with now, instead of doing nothing and hoping that your life will improve so that you can cover the shortfall in the future. Not only does postponing dealing with the problem for the future not usually work out, but the debt will have grown much faster than most people can imagine. If you deal with the problem, when it is small, you will have more options for resolving it, and the IRD is also likely to be able to offer you more flexibility.

We are here if you need assistance with your situation.

Student loan debt has a significant impact on young people's ability to get on with the normal milestones of life, including owning a home, starting a family, launching a business, or saving for retirement.

A leading financial commentator notes the overwhelming impact of student loans on house ownership: "the fact is that 83 percent of people age 22 to 35 with student loan debt who have not bought a house blame it squarely on their overwhelming loans – not their age, and not their careers"

Jennifer Beeston, a leading mortgage broker states that: “I think student loans are our next big financial crisis as a nation. Student loans are the largest issue I’m currently seeing in potential homeowners. In many cases their student loan payments are as much or more than mortgage payments.”

Although the commentators are speaking from a US perspective, New Zealand student loan borrowers are in many ways in a worse position, as at least, in the US, there are government schemes that allow people with disabilities, long term debt, or government service to have their loans forgiven. There are also many, quality, universities that charge no or low fees, giving young people the chance to start their professional lives without crippling debt.

We have previously discussed the benefit in being deemed as a New Zealand resident student loan debtor, even though you are physically living overseas. Interest can be wiped and there may be no compulsory overseas assessments of up to $5,000 per annum. Instead, your payment will be calculated on your income, just like it would be for someone physically living in New Zealand.

A common issue that we come across is the difference in tax years between New Zealand and Australia. In New Zealand, for most people, the tax year ends on 31 March. In Australia it is 30 June. If you have been granted an interest exemption on your student loan, your income needs to be advised to the NZ IRD for the period of the New Zealand tax year. Because this won't be the same as your Australian tax year income, we advise that you keep pay slips and other records so that the correct period of time can be calculated. We can assist if you need help interpreting or reporting the correct data.