How big of an issue will this be?

[Deleted User]

Afternoon all,

I'm considering bankruptcy, its pretty much my only option at this point. I'm a healthcare student, the bankruptcy shouldn't impact my job at the end of my course as it should be discharged. I'm not sure I'll be able to register with the HCPC if I'm not discharged.

I'm aware I need to put every debt down I have. 2 are student loan overpayments which may or may not be covered by the bankruptcy. No one seems 100% sure, and the insolvency service is currently closed for calls. I've been seeking advice today and have an issue I'd like some advice on.

One of these overpayments happened because I left my postgraduate course in January 2019 due to some personal issues. I was still paid the student loan payments in January as I was still a student, I left the course approx 2 weeks later.

I was also paid the student finance in April despite them knowing I had left my course. I spent this money, goodness knows why but I thought it was paid correctly! Obviously a couple of months later I realised that it was paid in error and I should have immediately called to arrange repayment. Because the university notified SFE that I left in December 2018, which was my last actual date of attendance, rather than that I left in mid January when I spoke to them about it and made the decision, both of these payments count as an overpayment and so I have a debt with SFE of just over £7000.

How likely am I to be placed under a BRO because of this? I don't think stupidity is a very good excuse so I'm assuming it will happen. I've emailed the HCPC to ask if this can stop me from being registered or if it is dependent on the circumstances.

Thanks for any advice, yes I know I'm an idiot or at least was more of one back then

Minkym00

Bankruptcy might not be the best option. Student loan debts survive bankruptcy so you will still have to repay that debt (see 7.2 here https://www.gov.uk/government/publications/guide-to-bankruptcy/guide-to-bankruptcy)  A BRO therefore is not a concern. How much is the rest of your debt?

fatbelly

What other debts do you have?

[Deleted User]

I have approx £30000 between a variety of older debt and some new.

Catalogues, credit cards, mobile phones, from years ago which I've been paying off. Some are new debts which have accrued over the last couple of years, a couple of small credit cards, my outstanding car finance (when they take the car back), tax credits overpayment, a variety really.

I was struggling but doing fine until last month.

I had no work after Covid closed my business (childminding and none of the parents were going back to work), we moved house so I could be closer to university and all my benefits stopped, I'm waiting to hear about Universal Credit but I'm basing all my assumptions on receiving 0 as my student finance will be deducted first.

flipflopflo

I don't think they can take student loans from UC so I don't think you have to worry about that(I am sure someone will correct me if I am wrong.)

MalMonroe

Hi, have you tried contacting one of the debt-help agencies? 

They should be able to give you some advice. I used StepChange when I had a Debt Relief Order a few years ago and I found them to be very knowledgeable, not at all judgemental and really helpful. 

They even submitted the DRO for me (although I had to pay my own fee, of course) as they are authorised to do that and going through them made things a bit easier.

If you could just chat through some options with them, that might be helpful. There are other debt help agencies, you can google them - but don't pay for advice. 

StepChange link : https://www.stepchange.org/  Good luck! There is help out there. 

[Deleted User]

Thanks I have been working with Stepchange they’re very helpful! But they can’t say whether or not this will be a big issue or not. Maybe I can keep the student finance ones out of the bankruptcy and it won’t be an issue.

Minkym00

I reiterate, student loans will not be an issue to the OR as you will have to pay them back. Your new debt in the last 2 years may be, but if it was incurred through general living expenses, and not extravagant, then it won’t be a problem either. 

You only repay student loans if you meet the salary threshold. You won’t meet that threshold on Universal Credit as a single claimant surely?

[Deleted User]

Thanks Minkym00. An overpayment is immediately requested back, regardless of income or working status. This is why the advisor at Stepchange thought they may be able to be included as it is treated differently. I have no idea if I will even receive UC so I'm not concerned about that at the moment, though my tax credits overpayment will reduce any payments I do get. My debts have built up through general living expenses and over committing on credit when my income was much higher, I could afford the things then but now cannot. It was borrowing for Christmas, for home improvements etc. Nothing extravagant, no holidays or cars or anything exciting really. I don't see my situation improving while I am studying, so 3 years time. I'm looking for jobs of course, but I am going on hopsital placements in January for several weeks and likely to have to go into university from March so it limits the hours I can apply for.

fatbelly

I'm with minky on this. An overpayment of a student grant can be a qualifying debt but not an overpayment of a student loan.
If you've got 30k of other debts, and no assets, then bankruptcy sounds suitable. But the student loans are excluded by statute.(since 2004)

[Deleted User]

Thanks all, very helpful advice