A 52-year-old Kiwi lawyer is considering bankruptcy to wipe his $85,000 student loan debt.

A lawyer says he will die in debt after a retrospective change to his student loan contract added $69,000 to the initial $16,000 balance.

The 52-year-old is considering career-ending bankruptcy to wipe the $85,000 debt that impedes his ability to travel, own property and fill up his 1998 Mazda Bounty ute.

The man, who cannot be named without jeopardising his job, pays 18 per cent of his $52,000 salary towards interest alone.

He wishes he never came home after 18 years in the United Kingdom.

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Graduating from the University of Canterbury in 1993, he struggled to find work and decided to try his luck abroad.

In the UK, he faced the stresses of self-employment, divorce and depression.

"There were a few good years, most were average and a few were truly awful," he said.

"When I worked in law firms as a partner or consultant it remained on the basis of taking a share of what I billed. I never had a salary, my income was all over the place. For years I put my head in the sand; I'm quite honest about that."

Thinking he would suffer a small penalty for shirking his loan repayments, he offered Inland Revenue (IRD) $30,000 to clear his debt before returning home. IRD refused.

He did not know the Government changed student loan contracts in 2006 to charge overseas borrowers interest, increasing his debt by 337 per cent.

IRD writes off loan interest for current students and domestic residents, but late payment adds interest, even if the debtor lives in New Zealand.

Late payment interest could be waived if it was caused by "genuine error on the borrower's part" or matters beyond the person's control, but only if "the outstanding repayment obligation is paid in full first," an IRD spokesman said.

IRD declined the lawyer's 2014 hardship application because his $40,000 bank balance would cover $34,473 of late payment interest, leaving an outstanding $69,175 obligation. He was unemployed at the time.

"[IRD] said they believed I had arranged my affairs so as to give the appearance of having no income," he said.

"They issued a notice requiring payment in excess of $40,000 in 14 days."

A two-year legal battle followed. IRD eventually withdrew its court proceedings.

The lawyer now pays a quarter of his salary – $1100 a month – towards his loan debt and mounting late payment interest.

"I do struggle not to get overwhelmed by it. I drive to work in the morning and wonder why I'm doing it; if I didn't have immediate family I would just stop working."

The possibility of arrest at the airport marred a trip to Australia for his parents' 60th wedding anniversary in 2014.

"People of that age, all they want is to be together with their family. I had to have a chat with my dad and say . . . 'they consider me one of their high-profile serial people who don't take their loan seriously'."

Overdue loan debt owed by Kiwis worldwide topped $1.07 billion last year, up 11.3 per cent on the year prior. About $982 million (92 per cent) is owed by the 15 per cent of borrowers overseas, who IRD can issue arrest warrants for or pursue through court.

Those methods recovered less than $230,000 in the last five years.

The lawyer says he could not understand why IRD, unlike other creditors, would not accept lump sum payments and write off the rest to settle large debts.

"That much money now, compared to the compliance costs, is worth it."

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