LSAP REPAYMENT - Notice In!
Options
crb1983
Posts: 3 Newbie
My chit is in and my TX date is January '18. I have nearly £7K outstanding on my LSAP loan and fully understand that this has to be repaid in full before the RN will allow me to leave.
JPAC called today to inform me that the outstanding balance needs to be repaid now and in full. If I cannot do this then over £600 would be deducted each month from my £1600 monthly salary to recover the 'debt'.
I was expecting to repay the debt once my house is sold, which will be put on the market in August. The house is worth more than what I payed 4 years ago plus positive equity due to repayments.
Problems:
1. I cannot afford to pay the lump sum as I do not have enough savings. All my money is tied up in the house.
2. The proposed monthly deductions are unaffordable, with less than £300 left over each month after mortgage, bills, fuel, car repayments and living costs.
I proposed to JPAC that I repay LSAP later in the year once the house is sold. This is not an option. I have to repay it all or repay in installments (though with only 8 months until my TX date the repayment proposed still wouldn't cover the outstanding balance!).
Can anybody advise me on my options. JPAC suggested I get a personal loan which is a ridiculous thing for an employer to say to an employee.
I don't understand the rush. I accept the RN want the money before my TX date and are worried about failure to pay, but if I can't pay then they surely just delay my termination. Why can't they just wait for the house to sell? The loan is levied against the house in any case with the RN even named on the mortgage as a stakeholder.
If LSAP is a loan, then the RN is a creditor. Shouldn't this be treated like any other financial arrangement, an arrangement which nobody is yet to fault on??
A creditor taking steps to push somebody into further financial hardship through no fault of their own seems excessive. Unless it's another desperate retention ploy.
My head's a bit pickled on this so any help/advice would be great.
JPAC called today to inform me that the outstanding balance needs to be repaid now and in full. If I cannot do this then over £600 would be deducted each month from my £1600 monthly salary to recover the 'debt'.
I was expecting to repay the debt once my house is sold, which will be put on the market in August. The house is worth more than what I payed 4 years ago plus positive equity due to repayments.
Problems:
1. I cannot afford to pay the lump sum as I do not have enough savings. All my money is tied up in the house.
2. The proposed monthly deductions are unaffordable, with less than £300 left over each month after mortgage, bills, fuel, car repayments and living costs.
I proposed to JPAC that I repay LSAP later in the year once the house is sold. This is not an option. I have to repay it all or repay in installments (though with only 8 months until my TX date the repayment proposed still wouldn't cover the outstanding balance!).
Can anybody advise me on my options. JPAC suggested I get a personal loan which is a ridiculous thing for an employer to say to an employee.
I don't understand the rush. I accept the RN want the money before my TX date and are worried about failure to pay, but if I can't pay then they surely just delay my termination. Why can't they just wait for the house to sell? The loan is levied against the house in any case with the RN even named on the mortgage as a stakeholder.
If LSAP is a loan, then the RN is a creditor. Shouldn't this be treated like any other financial arrangement, an arrangement which nobody is yet to fault on??
A creditor taking steps to push somebody into further financial hardship through no fault of their own seems excessive. Unless it's another desperate retention ploy.
My head's a bit pickled on this so any help/advice would be great.
0
Comments
-
I've been retired for a while now, so hopefully someone with more up to date knowledge of the LSAP will chip in.
In my day, the loan was only available to those on full pensionable engagements, with any outstanding amount due being recovered from the pension lump sum.
How much service will you have accrued by Jan 2018? If 12 years plus, then can this £7K be recovered from your terminal grant?
If you will have less 12 years, however, then I can understand that other repayment rules would kick in - were these not explained in the loan paperwork?0 -
Just under 8-years service at TX date so no terminal grant coming my way.
It was explained to me that the balance would have to be paid before I was allowed to leave the service (which, reading through the JSP I was completely aware of and agree with).
The timescale and urgency of the repayment is what I am struggling with.0 -
Sadly, that makes sense - if you were allowed to leave with this debt then the RN would have the added costs of maintaining a payment schedule for you - with no guarantee that you would be able to keep up the repayments from your (possibly lower) civilian pay.
How have you asked to leave - 18 months notice or PVR? - and whilst you say that you have 'put your chit in' has your exit date been confirmed yet? I think you may well be right when you say that your termination date may be deferred until you have paid off the loan in full.
ADD - Had a look at the regs, but LSAP has been replaced by FHTB. However, it would appear that similar conditions apply re PVR:Should an individual in receipt of a FHTB loan leave service within the
10 year repayment period then the balance of the loan will have to be settled on leaving service. Terminal benefits can be used where applicable.Personnel in receipt of a FHTB loan will not normally be granted early termination unless they have made acceptable arrangements to repay the loan in full.0 -
12 months notice has been given. Notice was handed in after the new year.
I won't be able to leave until the debt is recovered, so their is no risk of me leaving and the service having to recover any debt from me as a civvie.0 -
This crossed with my ADD.12 months notice has been given. Notice was handed in after the new year.
I won't be able to leave until the debt is recovered, so their is no risk of me leaving and the service having to recover any debt from me as a civvie.
I think you'll find that the £600 per month repayments have been limited by MDR regs (ie, your monthly pay can't be less than your 'minimum drawing rate') and that your notional release date will be pushed back until the whole amount has been paid. Can you manage these repayments until the house has sold? Could you put it on the market before August?0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards