Wrong Arrears?

michael1965

Hi,

I left uni in 1999, then I moved town with my partner and get a job temping for a bank. I was earning less than the threashold wage for repayment of my student loans.

About a year and a half or so later I received a letter from the slc saying thatI owed them x amount in arrears. I explained to them that I was earning less than the threashold, but they said that the onus was on me to tell them imediately upon leaving uni that that was the case, and, thus I had been building up arrears in the time since leaving uni. So, I had to start paying off the arrears, as they weren't eligible for the repayment threashold.

Thas was some time ago now. Since then I have given up work to teach myself web design with the aim of starting my own company. During this time I have not received ANY benefits at all, I haven't earned any wage at all, and my partner has been feeding me and buying my shoes (I live with her and she pays all the bills). When I gave up work (the temp contract came to an end) I contacted the slc and arranged for the continued deferment of my loans and to pay the arrears at £20 per month (my partner pays the arears). So they've been getting £20 a month for about four years now (I'm a very slow learner, but I'm nearly there).

Then, I get a letter and call on the same day from the slc saying that the arrangement has gone on long enough and I either have to pay all the arrears off in one go or arrange amuch higher monthly payment. I explained that I have no income whatsoever and that my partner has no intentions of increasing the £20 per month. He insisted that one or the other must happen - again I explained slowly that there was zero chance of the £20 going up as my partner wouldn't agree to it, and that I had no income or benefits or savings so there was no chance of the arrears getting paid in one lump. Eventually he agreed to continue the current arrangement until December, at which point something would need to happen or he'd send round a 'door step agent' (the cost of which will be added to my bill).

So,

a. how is it that arrears can build up when I was never earning enough to actually pay off the loan?

b. I was under the impression that it was the job of the wages department of the business I worked for to tell the slc of my inability to begin payments.

c. How many other thousands of people have fallen into the arrears trap by not IMMEDIATELY telling the slc that they weren't able to begin payments (the guy on the phone says that the arrears began building up immediately at the end of the academic year)

d, Why is it that payments can be defered but arrears cannot (especially given that payments had never actually begun.)

e. What can they do to get the arrears off me? I have no money at all. And if they send a 'door step agent' to get money I haven't got it'll only increase the debt!

f. If a ccj is issued they won't be able to get a penny as I dont have a penny, they won't be able to send round the bailiffs, as I have no property. BUT the cost of the court etc will be added to my debt - making it bigger!

All of this is because I didn't contact them from the degree ceremony to tell them I wasn't earning enough to begin payments.

Finally, If I have a ccj I won't be able to get a business bank account, and I won't be able to start a legitimate business.

CAN THIS BE RIGHT - AM I MISSING SOMETHING - did they get it wrong??

Does anyone have experience of this, and/or advice?

Oldernotwiser

michael1965 wrote: »

Hi,

I left uni in 1999, then I moved town with my partner and get a job temping for a bank. I was earning less than the threashold wage for repayment of my student loans.

About a year and a half or so later I received a letter from the slc saying thatI owed them x amount in arrears. I explained to them that I was earning less than the threashold, but they said that the onus was on me to tell them imediately upon leaving uni that that was the case, and, thus I had been building up arrears in the time since leaving uni. So, I had to start paying off the arrears, as they weren't eligible for the repayment threashold.

Thas was some time ago now. Since then I have given up work to teach myself web design with the aim of starting my own company. During this time I have not received ANY benefits at all, I haven't earned any wage at all, and my partner has been feeding me and buying my shoes (I live with her and she pays all the bills). When I gave up work (the temp contract came to an end) I contacted the slc and arranged for the continued deferment of my loans and to pay the arrears at £20 per month (my partner pays the arears). So they've been getting £20 a month for about four years now (I'm a very slow learner, but I'm nearly there).

Then, I get a letter and call on the same day from the slc saying that the arrangement has gone on long enough and I either have to pay all the arrears off in one go or arrange amuch higher monthly payment. I explained that I have no income whatsoever and that my partner has no intentions of increasing the £20 per month. He insisted that one or the other must happen - again I explained slowly that there was zero chance of the £20 going up as my partner wouldn't agree to it, and that I had no income or benefits or savings so there was no chance of the arrears getting paid in one lump. Eventually he agreed to continue the current arrangement until December, at which point something would need to happen or he'd send round a 'door step agent' (the cost of which will be added to my bill).

So,

a. how is it that arrears can build up when I was never earning enough to actually pay off the loan?

b. I was under the impression that it was the job of the wages department of the business I worked for to tell the slc of my inability to begin payments.

c. How many other thousands of people have fallen into the arrears trap by not IMMEDIATELY telling the slc that they weren't able to begin payments (the guy on the phone says that the arrears began building up immediately at the end of the academic year)

d, Why is it that payments can be defered but arrears cannot (especially given that payments had never actually begun.)

e. What can they do to get the arrears off me? I have no money at all. And if they send a 'door step agent' to get money I haven't got it'll only increase the debt!

f. If a ccj is issued they won't be able to get a penny as I dont have a penny, they won't be able to send round the bailiffs, as I have no property. BUT the cost of the court etc will be added to my debt - making it bigger!

All of this is because I didn't contact them from the degree ceremony to tell them I wasn't earning enough to begin payments.

Finally, If I have a ccj I won't be able to get a business bank account, and I won't be able to start a legitimate business.

CAN THIS BE RIGHT - AM I MISSING SOMETHING - did they get it wrong??

Does anyone have experience of this, and/or advice?

I think that you're on the old style "mortgage" repayment style of loan, as I am. If you don't defer the loan at the right time (I thought that was the April after graduation, but could be wrong) then the repayments are supposed to start immediately and if you don't pay, they become arrears. It's certainly not the responsibility of your employer to deal with this or what would happen to someone who wasn't working?

If you get into difficulties with any debt than you need to liaise with your creditor about payments and by allowing you to make such low payments for this period of time, the loan company has been quite fair. They probably can hardly believe that you've been living off your girlfriend all this time (frankly neither can I but I suppose that's another thread!)

Basically, they can take further action against you, including taking you to court if they so wish. If nothing else, they'll see this as setting an example to anyone else who tries to avoid payment. Why not just get a job and pay it off?

As to the rest, I'm at a loss what to say! What a waste is about the politest comment I can make, as well as God help your partner!

celyn90

Hi OP, I'm also on one of these old system loan schemes - and as oldernotwiser says, it is up to you to defer manually each year if you aren't earning enough. You have to tell them how you are supporting yourself - and if that is via third party support, you have to send a statement (a letter from her stating the magnitude of support), plus bank statements etc etc).

In answer to your questions - arrears build up because the onus is on you to inform the loan company of your circumstances as stated in the T&C of the loan agreements. As you didn't, they are within their rights to smack arrears on the account regardless of you earning power. And they can ask for them back whenever they like as they are not covered by the generous conditions that the old-scheme student loans were issued under.

It depends on the loan system weather the business you worked for should have informed them. If you are an old scheme student (like myself and oldernotwiser - so you started your degree 1997 or earlier and pay directly from you bank account) then it is nothing to do with the employer at all. This is stated clearly in the loan agreement you signed. In any case, my tax forms for casual employment do ask you clearly if you are a new scheme student, so even then the onus is on you to state your status.

It is up to you to inform them straight away when you finish - and to be fair it isn't actually straight away, you have almost a year after you finish if I remember correctly. I was sent a notification stating when payments were due to being along with a deferement notice under the same cover before they started. I am also at a loss how you could not notice that they were attempting and failing to debit stuff from your bank account and let it go on. I'm suprised the bank didn't contact you or flag it up if they were refusing payments. The SLC are also likely to have sent some form of correspondance to you at some point - be it a statement, a notice of arrears or a request to begin payment. This may have gone to a previous address or to your garentors if you didn't update them.

My advice to you would be to write to them stating your situation plainly and ask them for their advice as how to proceed. Show willing to co-operate with them. If they do take you to court they might not get their money straight away, but they will wait and take it from you as soon as you can pay. Be aware that they are within their rights to ask for the whole lot back from you in one go - this happened to a friend of mine - they asked for the loan amount itself in full in one go. To be honest, if you can, I would suggest getting a part-time job in the evenings or at the weekends (at least) to try and pay back some of what you owe them in terms of arrears. You should be able to fit this round study easily and even if you can't pay back all of what they want straight away, they may be more willing to negotiate with someone who is showing willing and making positive steps.

You might want to tootle over to the DFW board and ask for advice about handling doorstep agents and ccjs, but at the moment I think you have sufficent time to sort it out before this happens if they are giving you until december to make some changes. The people over there are lovely and I'm sure will have some more practical advice about these things should it come to it. You are right though, the arrears and a ccj will not help you setting up a business one little bit as a bank might not be willing to extend certain financial services to someone they percieve to be a risk. best of luck sorting it out - but do try and do something positive now rather than wait until december when their goodwill might evaporate, cel x

Oldernotwiser

Spot on Celyn90, except to point out that OP is not studying as in being on a course, but has spent the last 4 years not working and teaching himself web design so there's no reason why he couldn't get a temp job for a couple of months and get the whole thing sorted.

I do hope the OP makes it over to the DFW board; as you say they can be very helpful and I look forward to reading their comments.

celyn90

Oldernotwiser wrote: »

Spot on Celyn90, except to point out that OP is not studying as in being on a course, but has spent the last 4 years not working and teaching himself web design so there's no reason why he couldn't get a temp job for a couple of months and get the whole thing sorted.

I do hope the OP makes it over to the DFW board; as you say they can be very helpful and I look forward to reading their comments.

:eek: :eek: :eek: 4 years??!?!! *faints*

Esqulax

I have to admit.. 4 years... full time ... teaching yourself web design...
really?

No thoughts of maybe getting a part time job?
Im sure it wont get too much in the way of your learning, espcially if its only weekends.