Student Bankruptcy

Bankruptcy is one way of dealing with debts we cannot afford to repay, however,
since 1 September 2004 a loophole was closed making the student loan
non-provable in bankruptcy. Essentially this means that any outstanding student
loan cannot be claimed in bankruptcy and it remains the responsibility of the
former student to repay.

Therefore if you are a graduate or a student and are considering bankruptcy
it is essential to take advice as you may still end up with debts even after
bankruptcy.

There are two types of student loan. The first type was available to students
who commenced their courses between September 1990 and August 1998 and
is characterised by the direct debit method of repayment to the student loans
company. It is known as "mortgage style loan". The second type was available
to students commencing in September 1998 onwards and is commonly referred
to as "income contingent loan". It is characterised by repayment through the
tax system.

Mortgage style loans have always been non-provable in bankruptcy, however
for a period of time the new type of loan wasn't. As a result many students
and graduates in England and Wales used bankruptcy to wipe their student
loans until the Higher Education Act 2004 was used to close the loophole.
Now all student loans are repayable even after bankruptcy.


Related searches;

Student Financial Advice
Student loans
Student Bankruptcy
Student Grants
Student Bank Account