Loan Arrears

Huggybear2008

Guys,

I've just been sent a letter by some debt recovery guys chasing for a student loan which was taken out about 10 years ago when I was studying. I completely forgot about this.

They have sent me one "threatening" letter stating all off this must be paid straight away. This is the first time since having the loan that I have been contacted.

My question is do I still need to pay this back and what is my legal standpoint? They havent asked me for this loan before. I've been told that if they haven't asked for this money within six years then they can't chase me for it.

Can someone assist.


Thanxs

milliemonster

Hi, I would think this debt would now be statute barred, there should be a template letter on here somewhere for you to send to basically tell them you don't acknowledge the debt, whatever you do, don't pay anything towards it yet, someone should be along soon to give you more pointers

sdooley

Is it over six years since you last made a payment on the loan?

Is it a bank or a government student loan?

Huggybear2008

I have never made any payments towards this as I completely forgot about it. I got the loan though a fresher fair at the university.

milliemonster

but is it a student loan or a general one? I am presuming its not a student loan right?

Huggybear2008

No this was a student loan through Student Loans company ...

fermi

Huggybear2008 wrote: »

No this was a student loan through Student Loans company ...

I presume these were the old mortgage style student loans?

Link: Factsheet | Liability for Debts and the Limitation Act (England/Wales)

Student loans

Student loan agreements are simple contracts and this gives the Student Loans Company (SLC) six years from the date you last paid or acknowledged the debt to go to court to enforce the agreement. There are two sorts of student loans and different rules apply depending upon when you took out the loan.

Old style student loans

Old style or 'mortgage' student loans are consumer credit agreements. Payments cannot automatically be deducted from your wages. The SLC has to go to court before they can enforce the debt against you. This means that the Limitation Act can apply if you have not paid or acknowledged the debt for over six years.

WARNING Asking for the loan to be deferred could count as acknowledging the debt and start time running again.

New style student loans

From September 1998 new style or 'income contingent' student loans include rules to say that repayments will be automatically deducted directly from your wages or through your tax return if you are self-employed. This means that the SLC are still allowed to take money from your wages for a loan over six years old as they do not have to go to court to do so.