If a borrower has any amount of default on their student loan, they face the risk of an
arrest warrant being sought if they do not contact Inland Revenue to address their
If you are an overseas based borrower and have overdue student loan debt and want to avoid the risk of arrest you either need to pay or make debt repayment arrangements with the IRD. When the new law comes into force we expect the IRD to be inundated with worried student loan borrowers so the time to act is now.
One question that often comes up is the effect of bankruptcy. If you become bankrupt you cannot leave New Zealand without the permission of the Official Assignee. If you are overseas based, and coming back to New Zealand for a visit, you need to apply for permission to leave again before finalising your travel plans. If permission is granted it is our opinion that this should mean that you are safe from arrest, however, the situation will need to be checked and confirmed once the new legislation is passed.
Do you have any questions? Please contact us if we can help.