Massive Student Debt - Bankruptcy or IVA?

Ruatha

Hi Everyone,

What a fantastic forum this is – I hope I can get some advice and maybe return the favour in the future.

Bear with me as I explain my stiuation….

I entered veterinary medicine in 2005 as a graduate and am now in my 4th out of 5 years of study in this very expensive course.
I have taken out 3 professional study loans from HSBC, Natwest and Barclays – these are deferred repayment loans that I do not start to repay until after graduation. In addition, I have a small car loan (£3,200) and 2 credit cards (£2,500).
The interest is mounting every day on the professional study loans and they currently stand at approximately £80,000 – this will be a larger amount in 2010 when I qualify.
Right now, I am running out of funds to pay for my car loan and credit cards.
What I would like to find out is, if I can no longer pay my car loan and credit cards and consequently go bankrupt – will my deferred loans also be written off?
To complicate matters, my name is on the title of my partners property. Am I right in thinking that I need to disassociate myself from the property for at least 1 year to prevent it from being reposessed?

My other option would be a individual voluntary arrangement – again, does anyone know if this would reduce my deferred loans as well credit cards and car loan.

Thank you so much for reading – I hope you can help!

Ruatha

Deep_In_Debt

Hi
Welcome.
Firstly, seek advice from one the debt charities - CCCS, National Debtline or CAB. CCCS have an on-line debt remedy tool that you could try, which will advise you of the best way forward.

Secondly, IVA's are only suitable if you have assets to protect such as property as you would be expected to release equity in year 4.

Can't really help much on anything else apart from can you pop up and SOA and the experts here will try and find ways to help you save money.

Ruatha

Ok, I'll give that a try.

Thank you!

Anyone had any experience with professional study loans?

skylight

Student loans are not included should you wish to go bankrupt - they will be repayable.

And its my understanding that in an IVA too they are not part of the agreement and have to be paid normally. Both of these options will screw your credit rating beyond recognition for years and years. BR is a lifetime thing and can affect you for evermore.

As for being on the property, disassociating yourself is not all that simple in BR either. If you are on the title, are you on the mortgage too? Have you input anything into the property? You could be deemed as having an interest in the property and the official receivers (OR) could have a claim on any portion of equity that is therefore legally yours to service your debts.


The car loan - is this a personal loan or HP?? In BR, if your car is on HP, then the car will be taken by the HP company. If the car is owned by you and its a personal loan then the OR may take your car too. Can you sell the car and get a cheaper one? How is your credit rating? Could you balance transfer credit cards to lower interest rates? I don't think (using only the info from your posts so far) that BR or an IVA would be the best option for you, so its perhaps other ideas to reduce outgoings and increase income - like find another job around the course, dumping the car (not literally.....:rolleyes:)


Post an SOA and we can see where you are spending too much money (cos we always are!!!)

ryandj

The OP is not talking about student loans (which come from the Student Loans Company), but about professional study loans from the banks.

Ruatha

ryandj wrote: »

The OP is not talking about student loans (which come from the Student Loans Company), but about professional study loans from the banks.

Yes, that's what I want to find out. These are personal loans specifically for funding professional study.

I am on the mortgage also, but I don't contribute anything at the moment.

RAS

You need advice from one of the debt charities above.

It looks like you will have a beneficial interest in the property (this can be established even if you are not on the deeds) and the OR would want this to offset your debts. The OR can reverse any change in the legal situation for up to 5 years if they think you have acted to remove an asset from your estate.

The whole area is a minefield and you need proper advice, not just a forum.

Ruatha

Thanks for the reply.

Hopefully the fact that I haven't been contributing to the mortgage means I won't have be seen as having a beneficial interest in it.
I will give the debt helpline a call.

I'm still wondering if anyone has a clue about the situation with professional study loans and bankruptcy??

Jacks_xxx

:wave: Regarding the house - if you would profit if it were sold then I think it will count as an asset in bankrupcty proceedings but I have no idea bout the loans to fund your education.

Have you tried posting this on the bankruptcy board where somebody will know all about this I expect?

Love Jacks xxx

Ruatha

Thanks Jacks :beer:

I'm new here, on which board exactly should I try asking about the education loans?

mummytofour

Ooooh I see you live in my part of the world, welcome to MSE.

There is a student money saving bored on MSE you could try there.