Sometimes people’s circumstances change and they just don’t have the ability to pay. For many reasons bankruptcy can often be the best solution as it usually gets rid of the student loan debt once and for all, and it stops any harassment dead in its tracks. If you have assets these may be at risk of being taken by the Official Assignee if you become bankrupt. Before making any decision on bankruptcy is important to weigh the pros and cons of your particular situation. For example, if you have assets of $5,000 and a student loan debt of $100,000 (perhaps the core debt was $10,000 but $90,000 in interest and penalties has been added) then bankruptcy could be a good option.
Sometimes there are people who simply have no chance of repaying the student loan debt but they have moderate assets. People in that situation can feel stuck as bankruptcy can seem like a bad option but, at the same time, they know that the debt will just continue to grow, as they can’t afford to pay it. If you are in a situation of being able to wait for between 2 and 5 years before becoming bankrupt it may be possible to place your assets out of the reach of the Official Assignee. This needs to be done properly so that there is no come back when you become bankrupt, and you also need to consider the options for stabilising the IRD in the meantime so that they don’t take action against you before you are ready. We can advise you on the best options in your situation and we can also assist with structures and plans that can deliver an outcome that works for you.