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  • FIRST POST
    • Tha
    • By Tha 21st Sep 17, 8:00 PM
    • 1Posts
    • 0Thanks
    Tha
    Bankruptcy And Student Loans
    • #1
    • 21st Sep 17, 8:00 PM
    Bankruptcy And Student Loans 21st Sep 17 at 8:00 PM
    Hi,

    I won't go into full details but I owe around £15000 to around 7 creditors, some of which are payday loans. I'm only young and have made a hole for myself that I am desperate to get out.

    I work part time and earn anywhere from 530 to 650 4-weekly. After all is said and done I have around £120 available a month. I've been reccomended an IVA by stepchange but I dont thik it is the right option for me as I have no assets and 6 years is a long time. A DMP will also take over 7 years.

    I'm seriously looking at bankruptcy and have the money put to one side. However I am starting a masters next week and will recieve my loan. It's 10500 in 3 payments and 6500 of that goes into tuition leaving me with around £4000 over the year.

    Obviously I am struggling to get by on my part time income, and am just wondering if the masters loan will be taken into account as income during bankruptcy or any other methods such as DRO. If it isnt It will make things much simpler, but if it is I will have to re-think my options again.

    Many thanks for the help, and if anything is confusing please ask!
Page 1
    • ToxtethO'Grady
    • By ToxtethO'Grady 21st Sep 17, 9:53 PM
    • 80 Posts
    • 39 Thanks
    ToxtethO'Grady
    • #2
    • 21st Sep 17, 9:53 PM
    • #2
    • 21st Sep 17, 9:53 PM
    First question is what are you studying? Some professional bodies will not allow membership to you when going BR and some will not allow it if you've ever been bankrupt.

    Your student loan will be viewed as income after all your essentials are taken care of; so your income is the £4K/12 - taking off books/travel etc. Will you keep up your part-time work as well?

    Did you tell the adviser at Stepchange your future plans? An IVA has to be sustainable for at least 5 years and studying can have a big effect on your income. Any advice is only as good as the information you provide.

    It's not up to anybody but you if you want to go BR - none of the advice agencies would be able to do it for you. Stepchange will always look at a repayment option before an insolvency one as they feel that has less of an impact. You could get advice from National Debtline or a CAB debt adviser to get other viewpoints on your situation.

    What's your home situation? You have £120 available on a quite low income, are you living at home with parents or with a partner? The OR can take in to account the household situation and may look at an income and expenditure for the whole household. Your contribution to household bills etc may be questioned if you state you pay the whole bill when there are other adults in the house.

    With your debt level at £15K, you've stated your surplus is £120 that would rule out a DRO, so BR would be the only option and the OR would probably set an IPA. Wait until you can post an SOA when you are studying and people on here will give advice on it.
    Last edited by ToxtethO'Grady; 21-09-2017 at 9:57 PM. Reason: Missed information
    • Starry-eyed
    • By Starry-eyed 6th Oct 17, 10:57 PM
    • 22 Posts
    • 8 Thanks
    Starry-eyed
    • #3
    • 6th Oct 17, 10:57 PM
    • #3
    • 6th Oct 17, 10:57 PM
    Hi. I am a student that was made bankrupt on the 25th September. My student loan was not taken into consideration, nor is there even a space on the application form to declare it. I contacted the Insolvency Helpline about student finance and they confirmed that it is not included as an income, nor is anything that you buy with it classed as an asset. I hope this helps.
    • Butts
    • By Butts 7th Oct 17, 5:33 AM
    • 163 Posts
    • 52 Thanks
    Butts
    • #4
    • 7th Oct 17, 5:33 AM
    • #4
    • 7th Oct 17, 5:33 AM
    Hi. I am a student that was made bankrupt on the 25th September. My student loan was not taken into consideration, nor is there even a space on the application form to declare it. I contacted the Insolvency Helpline about student finance and they confirmed that it is not included as an income, nor is anything that you buy with it classed as an asset. I hope this helps.
    Originally posted by Starry-eyed
    There is not a specific space for Student Loans but they would normally be put in Section 5 "Money you owe" along with the rest.
    • TheGardener
    • By TheGardener 8th Oct 17, 8:27 AM
    • 2,171 Posts
    • 2,056 Thanks
    TheGardener
    • #5
    • 8th Oct 17, 8:27 AM
    • #5
    • 8th Oct 17, 8:27 AM
    ... My student loan was not taken into consideration, nor is there even a space on the application form to declare it. I contacted the Insolvency Helpline about student finance and they confirmed that it is not included as an income, nor is anything that you buy with it classed as an asset. I hope this helps.
    Originally posted by Starry-eyed
    My only point here is that if you were to buy a car worth more than £1000 with your student loan or any other high value item - I'd be pretty certain that the OR will indeed have it. Whatever the source of the money you bought a high value asset with has no bearing on whether the OR can claim it as an asset.
    Last edited by TheGardener; 08-10-2017 at 8:55 AM.
    • ToxtethO'Grady
    • By ToxtethO'Grady 8th Oct 17, 1:23 PM
    • 80 Posts
    • 39 Thanks
    ToxtethO'Grady
    • #6
    • 8th Oct 17, 1:23 PM
    • #6
    • 8th Oct 17, 1:23 PM
    Hi. I am a student that was made bankrupt on the 25th September. My student loan was not taken into consideration, nor is there even a space on the application form to declare it. I contacted the Insolvency Helpline about student finance and they confirmed that it is not included as an income, nor is anything that you buy with it classed as an asset. I hope this helps.

    Student loans are a non-provable debt so you have to declare it but it will not be removed by the bankruptcy. You'll still have any deductions for the loan from your wages if you hit the threshold. As TG says if you buy an asset over £1K with your loan it's the asset that matters not the money you used to but it. You have to declare it to the Insolvency service.
    • rjwr
    • By rjwr 8th Oct 17, 7:08 PM
    • 314 Posts
    • 202 Thanks
    rjwr
    • #7
    • 8th Oct 17, 7:08 PM
    • #7
    • 8th Oct 17, 7:08 PM
    My only point here is that if you were to buy a car worth more than £1000 with your student loan or any other high value item - I'd be pretty certain that the OR will indeed have it. Whatever the source of the money you bought a high value asset with has no bearing on whether the OR can claim it as an asset.
    Originally posted by TheGardener
    Remember if you do buy a car to make sure you are not insured on any other vehicles, or have access to any other vehicles. I would have kept my motorbike if i didn't have access to my brothers car. In truth it was my car, he couldn't even drive, but I wanted to avoid this being taken so before i declared myself bankrupt, bought a car for £800. The OR never questioned why i gave my brother the money.

    My bike was worth £4000, the OR said that had i not had access to another vehicle, i could have kept it. So it's not automatically vehicles over a £1000 are taken.

    hope this helps.
    But never spend money you don't have to buy things you don't want to impress people you don't like.
    .
    Originally posted by kidmugsy
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