The country's only specialist adviser on going bankrupt to clear student debt says it's time to talk more about the growing impact it's having on people's lives.

"I think we do need to talk more about it. It is almost like a taboo subject but it has a tremendous impact on people's lives," says Kristina Andersen from Auckland Tax Hub Limited.

She started working on student debts because they were popping up increasingly frequently when dealing with clients' tax issues, she says, and for some bankruptcy was the only realistic option.

Too many people headed abroad to work and paid little heed to their student debts, many assuming they would be told if they needed to make repayments.

But an Inland Revenue Department crackdown, and the compounding effects of interest swelling balances owed has produced a wave of bankruptcies, and student debt now seems to play a part in around one in ten bankruptcies where it is the debtor who asks to go bust.

Interest on student debt for borrowers outside New Zealand dropped from 5.5 per cent to 5.3 per cent on 1 April, and late payment interest moved dropped from 9.5 per cent to 9.3 per cent, but they are still rates at which debts compund fast.

There were just under 109,500 overseas-based people with student debt at the end of June last year, and they were a collective $863.3million behind in their repayments, with over 70,000 of them not meeting their repayment obligations.

That's a substantial chunk of the entire student debt owed, which passed the $14.25billion mark last year.

Andersen's Studentloan.org.nz is attracting the notice of an increasing number of desperate overseas debtors, some of whom risk arrest if they return to New Zealand, and then try to leave again.

But recalcitrant debtors overseas are being tracked down, and last month New Zealand signed an information sharing deal with Australia to make that easier.

That enforcement drive is prompting the wave of bankruptcies, she believes. "I think it is becoming more common because the IRD has stepped up collection efforts."

What is happening is it is revealing to people the scale that their debts have reached, or prompting them to get their heads out of the sand and deal with them. The results of ignoring their debts can be horrific.

"Debts that are 400 per cent to 800 per cent higher than the actual amount borrowed are common. The New Zealand government has the strange belief that high interest will somehow encourage people to pay. It doesn't. Even those who want to pay often have no hope of getting back in control of their debt. They end up having no option but bankruptcy and the government gets nothing," Anderson wrote in a recent blog.

She told Sunday Star-Times that desperate debtors tell her they assumed if there were a problem, then the taxman would have come knocking for the money earlier.

In addition, she says: ""People have genuine misconceptions about how it works. I hear on a regular basis 'I have been earning below the income thresholds and I didn't think I had to pay."

A one-year repayment holiday is allowed to borrowers heading overseas, if they apply for it, but otherwise they are expected to start paying back their debts immediately, regardless of income.

And people with unmanageable student debt can go bankrupt here without even having to return, and Andersen can help them do it.

Going bankrupt is a big deal for some people, especially those with partners and jointly-owned assets, though for singles it can come as an enormous relief, and is worth the temporary loss of freedom and credit standing.

It's not only the comparatively young doing it.

"We also deal with people who are retired," she said.

"If they don't go bankrupt, the alternative is to be hounded by the IRD forever more," she said.

She deals with clients from many countries, but Australia is most common.

Anderson gets on well with IRD staff, but acknowledges: "I'm often seeking a different outcome from the IRD."

And she'd love to see all New Zealanders, both those who stay and those who head overseas, talk more about student debt, including the psychological effect of having such a large debt hanging over them.