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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22304
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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My son has a student loan debt that went from $50,000 to

Customer Question

My son has a student loan debt that went from $50,000 to $169,000 all in interest.
He lives permenantly in Japan since 2001.Can he take the no asset bankrupcty option to clear this debt .or can the IRD revaluate the debt and maybe remove the interest so the principal can the paid?.My concern is if the debt is not sorted he may not be allowed back in
to NZ,with his kiwi passport.
Any suggestion would be appreciated
regards
Neil
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

He cannot use the No Asset Procedure to cancel the debt as this cannot be used for student loans. But he can apply for bankruptcy, which is a more serious option, which lasts three years. This won't stop him travelling back to New Zealand although during the three years he would need to get consent to leave New Zealand if he came for a visit. This is because a bankrupt cannot leave the country without consent although he would get this if he explains he doesn't actually live here any more. It would be difficult to get the interest written off however as IRD don't have much discretion to write this off.

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