Sadly, some student loan debtors are forced into a position where they have no choice but to declare bankruptcy.
Problems often arise because the IRD has not kept to its legal obligations to keep people informed of changes to their debts, or because the IRD gives out wrong information. The result is that people who thought they had a $30,000 debt, and were never advised of changes to their loan agreement, or of interest and penalties being charged, are contacted out of the blue by the IRD, 20 years later, and told to pay $120,000 immediately, or else. Some people make large payments to the IRD, to repay their debt, only to then have them say that their figures were wrong and demand payment of more. When it comes to student loan debts, the IRD is not generally accountable when it makes mistakes or fails to keep to its obligations.
Almost every student loan borrower who becomes bankrupt first tried to resolve things with the IRD but found that the IRD refused to consider a reasonable payment plan or offer. Some of them are suicidal because of their treatment by the IRD. By leaving these people with no other choices, the IRD ends up worse off as they generally receive nothing if a student loan debtor becomes bankrupt. These people want to pay but are given no real choice.
We understand that the IRD is now putting pressure on to close the bankruptcy option. There is also pressure from the media to stop the bankruptcy option.
Bankruptcy is a big step and a last resort. For some people it is the only way forward. If there is any possibility that a bankruptcy might have to be an option for you, you need to look at this sooner rather than later, in case the option is suddenly removed.
Problems often arise because the IRD has not kept to its legal obligations to keep people informed of changes to their debts, or because the IRD gives out wrong information. The result is that people who thought they had a $30,000 debt, and were never advised of changes to their loan agreement, or of interest and penalties being charged, are contacted out of the blue by the IRD, 20 years later, and told to pay $120,000 immediately, or else. Some people make large payments to the IRD, to repay their debt, only to then have them say that their figures were wrong and demand payment of more. When it comes to student loan debts, the IRD is not generally accountable when it makes mistakes or fails to keep to its obligations.
Almost every student loan borrower who becomes bankrupt first tried to resolve things with the IRD but found that the IRD refused to consider a reasonable payment plan or offer. Some of them are suicidal because of their treatment by the IRD. By leaving these people with no other choices, the IRD ends up worse off as they generally receive nothing if a student loan debtor becomes bankrupt. These people want to pay but are given no real choice.
We understand that the IRD is now putting pressure on to close the bankruptcy option. There is also pressure from the media to stop the bankruptcy option.
Bankruptcy is a big step and a last resort. For some people it is the only way forward. If there is any possibility that a bankruptcy might have to be an option for you, you need to look at this sooner rather than later, in case the option is suddenly removed.
