bankruptcy and student loan.

bigfruitcake67

Currently going through bankruptcy and still paying the above,is their any way I can get this payment reduced? its 9% of any thing above the threshold.Also asked on redundancy forum but got no feedback,anyone know if I take voluntary redundancy will I get 9% took off my lump sum? or is there
anyway round it? e.g paid by cheque? many thanks.

GazHatesBanks

Student loans are specifically excluded from bankruptcy so will continue to need to be paid at the rate set by the Government - this amount should be included in your SoA submitted to the OR so would be taken into account in the calculation of any IPA.


I'm not 100% certain on redundancy payments. Certainly any pay in lieu of notice is subject to student loan deductions (as it is treated as earnings - you are just getting it all in one go).


Hopefully someone can confirm the treatment for the actual compensation (whether statutory rate or otherwise).


You also need to be aware, that if you are made redundant before discharge, the OR has a right to claim the compensation amount as an asset of bankruptcy.

martinsurrey

http://www.hmrc.gov.uk/manuals/cslmanual/cslm17055.htm

SL repayments follow the class 1 NI treatment, so for redundancy payments its not included in SL deduction calcs.

(this was the top google answer for "student loan repayment redundancy")