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New Zealand Student loan living in the UK


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I've been a real ostrich about my student loan in NZ ( which I know is very stupid!!).

My loan dates from the late 90's and I worked in NZ in 2000 & 2001 and made payments through my tax.

 

I've been living in the UK since 2001 and haven't made any payments since living here.

I'm finally taking control of my dire financial situation and would like to do something about my NZ student loan,

but I'm terrrified of getting in touch with the IRD incase they want me to pay back thousands every year......which I just can't afford at the moment.

 

Would I be able to arrange some kind of payment plan with the IRD?

I'm not planning on returning to NZ anytime soon but i've been reading stuff in their press in December about how they're going to crack down on the overseas avoiders.

Any advice on how to go about trying to sort it out would be very much appreciated.

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Hi,

 

Try:

 

bailii.org/ew/cases/EWCA/Civ/2009/46.html

 

oft.gov.uk/shared_oft/consultations/OFT664Rev_Debt_collection_g1.pdf

nationaldebtline.co.uk/england_wales/factsheet.php?page=25_liability_for_debts_and_the_limitation_act

out-law.com/en/topics/dispute-resolution-and-litigation/enforcement/enforcing-foreign-judgements-in-England-and-wales

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Hi,

 

Try:

 

bailii.org/ew/cases/EWCA/Civ/2009/46.html

 

Not quite sure why you have posted a couple of links, one regarding an harassment case and other OFT debt collection guidance, without any comments explaining how this relates to this thread. Plus what advice you are offering to the person who raised the query.

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hi,

 

I thought these links might be useful/interesting to those facing NZ student loans demands- one has a template letter. If you disagree please feel free to remove them.

 

Have a good weekend.

 

It was the lack of any comments to go with the links, which could have provided some guidance as to what you would do in this position.

We could do with some help from you.

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Hi,

 

To be frank the lack of comment is because I don't know what I'd do.

 

NZ students loans are fraught with risks whatever you do.

Ignore it overseas and NZ Govt charges commercial interest (6%-8%) plus penalties and demands a chunk of the capital back per year

- a potentially huge amount running into £1000s plus per year.

Make minimum payments then miss a couple and you face the same problem because of the interest/penalties.

If you make the payments, if your UK wage is average forget replacing a second hand car, owning a home, having a holiday (visiting your folks in NZ) etc and hand over the money to NZ govt instead.

 

Its a big headache for NZ Govt as NZ students now owe circa $14,000,000,000 in unpaid loans-more than the entire national debt.

 

Legally speaking whether they can enforce in the UK is a question of UK law as well as NZ law

- hence the links if people want to research what the UK law says

 

there may be some hurdles there but then again there may not and they may find the only option may be to pay or face bankruptcy or losing income/assets.

People need to make up their own minds what to do.

 

One thing is for sure it seems to be getting more draconian as NZ Govt gets more desperate to turn the screw on its ex-students:

 

nznews.co.uk/migration/?id=40646&story=Budget-2013--student-loan-defaulters-could-be-stopped-at-the-border

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Your comments confirm the reason I asked the question about what you would do.

It is OK posting helpful links, but the question is that how do I use the information.

 

I am not an expert on the NZ student loan scheme, but I would hazard a guess that such debts can be enforced for a very long time and are not subject to standard statute of limitations.

 

This being the case, it really depends on whether the OP would be returning to NZ to live there, as I just cannot see the NZ loan scheme people trying to enforce the debt through the UK courts.

 

It is not whether they could enforce the debt in the UK, as I expect they could if they wished to do so.

But would they be prepared to incur costs, when perhaps they may not recover these.

I suspect that they just get debt collectors to hassle people and enough people start repayments, for them not to bother taking some people through a court process.

 

This thread was started in 2011, so I doubt the OP will say what action they took in the end.

We could do with some help from you.

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Hi

 

I can confirm that the NZ govt has begun pursuing Student Loan debt in the UK by debt collector. I have received letters from CCI Legal regarding this. As I can't pay what they're asking, I'm following this forum closely. Its not clear to me the approach the collector will take, but it's clear they have not bought the debt from the NZ govt.

 

The NZ govt claim that for every $NZ1 spent on debt recovery they get $NZ11, which suggests to me they are currently willing to go the distance on this.

 

I'll update my progress (If I can call it that) when it happens.

 

J

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Hi - I've been contacted by CCI legal as well after years of pretending my two years of loans in 1992 and 1993 would go away.

I borrowed $7,000 each of those years which has ballooned to $70,000.

Not sure whether declaring bankruptcy in NZ is the best option here.

I've got Inland Revenue in NZ calling me back in 3-5 working days to discuss further.

Did you make any 'progress', Goulet?

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Hi Donna

 

I am now up to my third letter from CCI legal.

 

The first, declared that they have found me.

The second declared that if I dont reply within 7 days they would take further action.

The third told me if I did not pay up then they would instruct the NZ govt to take action within NZ and listed various NZ-type actions.

 

I suspect that this is the required precursor to taking any action in the UK.

Of which, it is not clear to me whether they can or cant take any action.

Unlike UK/Australia, I dont believe there is a reciprocal UK/NZ agreement about enforcement of debt action.

However, this might not be necessary.

 

I am in a position where I have no assets/savings.

My student debt has ballooned above $NZ100000.

I think I will probably make an offer of a regular indefinite payment.

However, I havent decided on how much yet.

 

Anyway, I hope that you have had success in your discussions with NZ IRD.

 

cheers

J

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I think you should get some debt advice from someone qualified in NZ. I would suggest that you don't make any offer of payment, until you have received the advice.

We could do with some help from you.

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  • 2 months later...

I finally got in touch with the NZ IRD.

 

As I have stated previously, I have not made any payments on my student loan since leaving NZ in 2002.

As, expected my loan has now spiraled to the ridiculous sum of $114,000 (I think it was around the $42,000 when I left the country).

 

I have had penalties whacked on top of it and am 14,000 in arrears.

I am also being charged $5000 interest on it every year, so I am going to be stuck with it for a verrrry long time.

The person I spoke to was actually very approachable and helpful in explaining the way forward.

 

If your loan is over $30,000 then you have to pay back a lump sum of $3000 by the end of each financial year.

There is a chance that new government legislation could increase this sum to $5000. Great.

 

I have also agreed to a reasonable payment plan to chip away at the arrears.

There is also a financial hardship option if you can't afford to make payments to clear arrears,

but you would need to show bank statements etc to prove this.

 

I have never been pursued for my student loan debt since living in the uk,

I think this was probably because they had no idea where I was!

 

The only real reason that I decided to get in touch with them was that I am returning to NZ next month for a holiday and I was genuinely worried about the hassle that I would get while I was there (or trying to leave!)

- there has been a lot in the media about cracking down on those who have been avoiding loans,

and I know of quite a few people in Australia who are now being pursued by debt collectors for their student loan debts.

 

I guess my advice to other kiwis in the same boat would be to bite the bullet and get in touch with the IRD as the debt will only continue to spiral out of control, or you could just never return to NZ and hope that don't catch up with you over here!

Edited by citizenB
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Under what New Zealand or international laws can the restrict your right of free movement, by taking such actions about student loans, as arresting you at an airport while on a visit. I would think that this would be breaking international laws. Debt in most countries ceased to be criminal decades ago.

We could do with some help from you.

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The Student Loan Amendment Bill (No3) had it's first reading in NZ parliament in August 2013.

The Bill proposes to make it a criminal offence for student loan borrowers living overseas to knowingly fail or refuse to make reasonable efforts to repay their loans.

 

It proposes to allow the IRD the ability to request an arrest warrant for persistent defaulters who attempt to leave the country after visiting for a holiday.

It also proposes to give the IRD greater powers in obtaining the contact details of borrowers from third parties.

 

The bill passed it's first reading 61-59, and was referred, in November, to the Finance and Expenditure Committee who are due to report back to parliament on the 27th February 2014. It's a very real possibility that this will become law.

 

The budget of June 2013 signaled that the NZ government are serious about chasing people up,

and gave the ok for private debt collectors to pursue loan defaulters both in Australia and the UK.

The government are also allowing for a greater sharing of information between border control/customs and the IRD.

Edited by donnahaywood
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There is no way that in the UK this type of law would be passed. It would cause a riot. I had no idea that New Zealand had been taken over by extremists. I suppose that if the non repayment of loans is causing a large impact on the countries finances, they have to take some action. Probably better to gain agreements with foreign governments so they have an easier way of accessing the foreign courts, so they can enforce repayments. I am sure the UK would like to be able to recover student loans of UK citizens living in NZ and Aus in the same way.

We could do with some help from you.

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Yes, it's a scary situation that they are trying to legislate against debt like that.

 

Last week the NZ Prime Minister went to Australia to try and negotiate a deal with the Australian government to allow NZ to have access to their tax records, so they could find people who are not repaying their NZ student loans

 

- it's estimated that kiwis living in Australia owe about $350 million in unpaid student loans.

 

I guess their hard handed tactics are working for them though, as apparently there has been an increase in people (like me!) contacting IRD and setting up repayment plans.

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Just curious - Will this legislation be retrospective or apply only to NZ Student Loans taken out after (if) it gets passed as law?

 

Presumably there would need to be something referring to the amendment included in any loan agreement signed by new student borrowers.

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The amendment to the student loan bill applies to anyone with a student loan who is not repaying it or is continually avoiding contact with the IRD.

 

The new legislation would give the government/IRD greater powers to get borrowers to repay their debt

- it's about changing the laws of the country to allow them to pursue student loan debt in a more aggressive way,

 

so I'm not sure why they would have to amend individual loan agreements.

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What is to stop someone with dual nationality, having got a passport where they are resident, in using their foreign passport and not their NZ one. If they did this then surely the NZ border people would not pick up any student loan issues. Just a thought.

We could do with some help from you.

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