Historical bankruptcy - I need advice please

fedupgeordie

Hi,

I had to declare myself bankrupt way back in 1999.

For the pretty low sum of approx £15,000 but at the time it was unmanageable for me to handle this.

I took complete responsibility for my debt as it included bank loan and credit card debts which started when I was at uni, it also included a loan for a car which was necessary for my job.

I remember being told by the insolvency practitioner at the time that I had to include the student loans on this bankruptcy submission but I was told by someone else (who I really can't remember) that this should not be included I think due to the repayment terms.

This was totally confusing as I was advised by insolvency practitioner that I should declare myself bankrupt and if I didn't include the student loan I couldn't do so as the amount would not be the minimum amount at which I could declare.

At the time I had returned to live back at my childhood home with my widowed dad, as a family we were still grieving the sudden loss of my mam, I had returned from my new life in London back to the north east, I had health issues, a really bullying boss and also the financial worries so I was very trusting in this Insolvency Practitioner.

So fast forward to 2025 and as a middle aged woman I decided I would like return to education. I was very embarrassed to find out that due to my student loan not being paid off I was unable to apply for my course fees to be paid (to be repaid once in employment earning a certain amount). I found this out after I was able to enrol onto the course and actually turn up on the first day of term.

Does anyone know how I can overturn this please?

Or even research or speak to someone who could advise me?

I'm in Newcastle upon Tyne.

Thank you for reading this.

Keep_pedalling

I do not believe student loans are covered by bankruptcy so your original loan will still be outstanding until you pay it off or it is written off sometime between 25 and 40 years depending on which plan you are on.

Not sure how this effects applying for further finance later in life though. Did you obtain your original degree? If so are you now on a post graduate course?

kaMelo

It doesn't matter whether you declare debts in your bankruptcy or not, bankruptcy included all provable debts except for those that are excluded. I can't remember exactly when, I think it was around 2003 (ish),the law was changed which made student loans an excluded debt from bankruptcy. Prior to this change student loans were included. As you went bankrupt in 1999 your student loan debts were discharged in bankruptcy. Even though you may not think it at the moment this is a good thing

It matters not how or why, anyone who has broken the repayment terms of their student loan is blocked from taking out further student loans, the only way to remove this block is to repay everything owed.

If you really want to return to education you have two choices. You can fund your new course yourself or repay the original student loan and then take out a new one to fund your new course.

If you choose to repay and take out a new student loan, be aware The Government are introducing the Lifelong Learning Entitlement, a lifetime amount you can receive in tuition fees. Your previous tuition fees, whether paid or not, are index linked to todays prices and deducted from the LLE. so you may only qualify for a reduced amount. If you would be subject to the LLE it would be good to know how exactly how much you can borrow for tuition fees. Knowing this figure may alter whether you choose to self fund or repay and borrow.

PS, I don't wish to pour fuel on the fire but given the date of your bankruptcy did you have any pensions prior to bankruptcy?

Jude57

I'd recommend speaking to the Official Receiver for their advice. The Higher Education Act of 2004 excluded all types of student loans from Bankruptcy but the Teaching and Higher Education Act of 1998 had excluded some types of student loan and you need to know what your loans fall under. That said, if your loan was included in your Bankruptcy application, and it seems from what you say that it was, that means that the Official Receiver at the time accepted it as a provable debt. If that is the case, the debt should have been written off at the time. That being so, the OR can write to the loan provider to instruct them to amend their records to show that the debt is now written off/settled. You should be able, after giving the loan provider a reasonable time to do that, be able to get their confirmation that the debt is dealt with. I'd hope that the University would give you time to resolve the issue before barring you from your studies. Perhaps the Student Union could help persuade the University if you can't get them to agree?

I've worked with the Official Receiver in the past and always found them very helpful. They generally love a complicated situation because it's a change from the humdrum, everyday cases they usually deal with. The contact details for the Newcastle OR is:

Northeast.OR@insolvency.gov.uk

The central phone number is 0300 678 0016. They will either connect you to the local office or take details for the local office to contact you direct.

I hope this is helpful.

kaMelo

@Jude57 said

That said, if your loan was included in your Bankruptcy application, and it seems from what you say that it was, that means that the Official Receiver at the time accepted it as a provable debt. If that is the case, the debt should have been written off at the time. That being so, the OR can write to the loan provider to instruct them to amend their records to show that the debt is now written off/settled

No one can instruct a lender to 'amend their records' as the debt is not written off, in England and Wales the debt still exists but is unenforceable. As such a lender is perfectly within their rights to ask the borrower to repay that debt before lending them any more money.

Jude57

https://forums.moneysavingexpert.com/discussion/comment/82085493#Comment_82085493

Would that not constitute preferential treatment of that particular creditor? It would seem iniquitous that a debt accepted in Bankruptcy 26+ years ago can still rear its head and have such far-reaching consequences when any consumer debt not pursued within a much shorter period is Statute barred.

QrizB

Would that not constitute preferential treatment of that particular creditor?

I think you're confusing two related things.

No, the creditor cannot pursue the bankrupt for the old loan through the courts.

Yes, the lender can choose not to lend more money to the bankrupt until they've settled the previous loan.

RAS

Student loan rules are somewhat different in many cases. For example if someone receives 4 terms worth of funding, they can't then start a new 3 year course and expect to be fully funded.

They will be allowed funding for 2 years, not 8 terms, but only if they self fund the entire first year. If they pay back the money received for the 4th term, they can expect 3 years of funding. In both cases, they have to pass all years because there is no leeway to retake a year.

Quite a lot of people accidently screw up future chances because they leave after a term and restrict their entitlement to future funding. Given their mental state, lack of understanding or immediate financial stress, they may even decide to take the funding for term 2 and leave shortly afterwards. Vicious as it may seem, they'd really be best advised to replay the loan as soon as they are financially stable so they have future options.

But they don't always receive advice, particularly if they disappear rather then actively discuss their plans with university and knowledgeable staff. Some academics won't know enough about finances to advise well.