I was a uni student 3 years ago and took out student loans, which now total almost £19,000. I have not been working at all and seeing the statements of what I owe makes me ill.
I also owe a few other accounts which total £3,000. I want to go bankrupt and start out fresh.
Can I include the student loans in my bankruptcy?
I can understand how receiving statements showing you owe £19,000, when you are not working can bring you down some.
You cannot include student loans in bankruptcy, however, the repayment plan for student loans is very easy to live with as if you are not working, or if you are working and earning under £27,295 a year, you are not expected to pay the loans back.
I realise this can keep a person in debt for a long time, but you are not expected to repay the loans.
An example(s) may be this:
- You go back to work, and earn less than £27,295 a year, or £2,274 a month. You are not expected to repay the student loans.
- You go back to work and earn £30,000 a year, or £2,500 a month. This is over the threshold set of £27,295 annually, by £2,705 a year, or £226 a month.
- You pay 9% of what you earn over the threshold to the student loans.
- In the example above 9% of £226 is £20.34. This is your monthly payment to the student loans.
Granted this can take a long time to repay the student loans, but it is an affordable way to repay them.
You can read more on this here.
For your other debts, you may wish to look into a token payment arrangement.