Do I have to pay my loan back?

Sandwich

Hey guys, I took out an unsecured loan a few years back to fund my Uni studies. It was with a company called Sallie Mae. They were supposed to loan my around £9000 each year of my studies (my course was supposed to last 3 years). Well, after the first year the company went bust, which kind of left me in the lurch (I ended up taking a CDL with the Co-op to pay my way).

Anyway, seen as how this company no longer exists, do I still have to pay the loan back? No doubt the loan will be sold on to some other company at a bargain rate, but is there any way I can avoid having to pay back? I know that as soon as my course finishes and I start working full time I just won't be able to stay afloat - what with my student loan, my co-op loan, my Sallie Mae loan and my bloody rent! :mad:

Somebody told me that if they don't get in touch with me within 6 years, the loan is voided and I'm free and clear. Does that apply if I simply ignore them and don't tell them my new address if I move house?

If not, what can I do about my situation?

Thanks in advance for the help, guys.

Tixy

If you are in England/Wales and if you didn't pay or acknowledge the debt for 6years and they didn't get a CCJ against you then it is true the debt would become statute barred. You still owe it technically but do not have to pay.

The problem is that for £9k it is quite likely that whoever owns the debt will get a CCJ against you. They don't need a new address to get a CCJ. And if you get a CCJ it will wreck any chance of you getting any more credit/mortgage etc for another 6years from the date of the CCJ (so potentially up to 12 years with no credit at all, it could be hard to even get a new bank account or mobile phone contract.)

If you had the money from them then yes you owe it back and need to pay.
If you were able to make a lump sum payment then it is possible that whoever has bought the debt might offer to settle for less but otherwise you will need to pay.

As to what else you can do, how soon do you finish studying? how much do you expect to earn?

Sandwich

Thanks for the info.

I won't finish for another year or so yet, and I won't be earning that much to begin with (or even down the line). I'll likely end up working as a lecturer and the pay isn't fantastic. I doubt I'll be able to pay back all these loans at once. I wish I didn't take them out now.

I'm starting to think that declaring bankruptcy is my best bet?

Tixy

Well its a pretty extreme measure, and you'd still probably have to pay into an IPA for 3years after the bankruptcy.

You may be able to negotiate paying reduced payments to your creditors, it might still impact on your credit file but could make things more manageable, plus you won't be paying much towards your student loan whilst on a low salary and maybe you could houseshare or similar to keep your rent low?

In the meantime can you get a parttime job whilst studying to reduce the amount you'll need to borrow? Do you have a summer job lined up yet? What field are you in?

Sandwich

I've taken a few part-time jobs, but they have really only allowed me to stay afloat while I finish up my studies. I might try to negotiate a lump sum settling of the debt.

Do you think if I offered them, say £4000 of the £7000 (that was actually how much I took out), they would cancel the debt entirely?

Also, the thing that worries me the most is if this new debt recovery agency tries to change the terms of the repayments (i.e. bumps up the interest, changes the way interest is calculated, etc). Can they do this, or are they obligated to stick to the original terms exactly?

One other thing that I think will really help me is if I could get the Co-op bank to defer payments on my Career Development Loan for another year until I can get myself into a better financial position. Do you think they would do this? And if so, do you think this is a good idea, because I imagine this option might cost me more in interest in the long run?

kevin4343

Hii,
I am in a same boat but i m paying back my loan to total credit financial services. wat abt u? have u started paying back ??

thnx