Ever heard of a persongoing to court due to Student Loan Company arrears?

ch0pski

Hello Moneysavers

I am in arrears with the Student Loans Company for £6,000.

I never contacted them, ignored their letters and paid nothing for the last 7 years.

Now I have received a letter from their debt recovery firm. I want to start paying it back using via an initial downpayment of £1,250 then payments of £200 per month.

1. Do you think they will accept if I call them?

2. Has anyone heard of a case where the SLC took someone to court for arrears? I know they threaten it all the time, but does anyone know of a case where it has actually happened?

I graduated in 1998 and as such am on the old 'mortgage' style of repayment schedule.

Thanks for any advice/comments! :A

anewman

If you never contacted them and ignored their letters then you will probably have fines and extra interest to pay on top of any original loan amount and interest.

I would contact the student loan company and have a very good reason why you never contacted them or replied to their letters.

If they have gone on to contact a debt recovery company they will probably try get you to pay up first and then do the usual serving notices and bailiffs coming to clear out your house and then that will pay barely anything on your loan as your expensive stuff will sell for barely anything and there are auction fees to pay and bailiffs to pay.

Not contacting them and ignoring them until the debt collection company got involved doesn't look very good I'm afraid to say. You probably won't get what you want but that's not much to pay for not giving the SLC what they want for 7 years is it?!

Janeywaney_2

Head in the sand won't work- the student loans company do take people to court for non-payment- and after seven years you may find that they have already a court judgement registered against you. Ring them and sort it out and take it as a learning curve that debts have to be paid. Good luck for the future.

dribsndrabs

Just a query - hypothetically, with the new style loans, if you don't earn over £15,000 a year (which should mean no automatic payments from inland rev to SLC), would SLC still expect some sort of voluntary payment to them, or would 7+ years with no payment result in a debt collection/court scenerio?

Blacksheep1979

If you want to play this one out you could (if its your loan you shouldn't really do this) - if you have had no contact and not paid anything in 6 years (ie no deferment, payments or letters to them) claim that the debt is time barred and you don't have to pay.

rikbar

dribsndrabs:

If you don't earn the threshold amount over 7 years plus you will not pay anything towards your loan and there will be no expectation of voluntary payments as this device is in place to ensure those earning less than 15k are not ham strung by repayments. You only have to pay back when you earn more than the threshold.

Blacksheep1979:
I am afraid in this case it is quite clear that the SLC have sent letters that have been ignored, it is also part of the terms and conditions that you inform them of any changes of address and keep your account details up to date. If they can prove that they have sent multiple correspondence to the address supplied it will be very very hard to claim that you have not been contacted for the 6 year time barr clause to be used.

ch0pski:
Right now you HAVE to act to stop any further charges being added to your account, it will only make it harder to pay back in the future. Contact the SLC at your earliest opportunity and explain the reasons for the non-payment. Only by opening dialogue can you determine whether a plan can be put in place that will suit both yourself and the SLC. Ignoring this could effect you far more than you might expect with regards the ability to get any future credit such as mortgages etc in the future. Good luck with it hope it all works out.

ch0pski

Sincere thanks to everyone who has replied to my posting. Here is a bit of follow up to tell you how I got along...

I called the SLC's debt collection people. Initially they were pretty aggressive, insisting I had to settle all of the £6,000 debt immediately or they will see me in court... all or nothing. I held my ground and offered a downpayment of £500 followed by £100 per month. Eventually we agreed £1100 downpayment and £110 per month thereafter.

I calculated I will end up paying about £200 (in interest and fees) more than the original sum of £6000 I borrowed all those years ago.

This outcome sounds pretty good to me.

The lessons are:

(1) Don't be pushed around too much by the SLC. They are not a commercial lender, this is a very different type of loan to - for example - a credit card debt. There appear to be strict restrictions imposed by the government on how aggressively the SLC can persue arrears (court action is extremely rare), and debt arrears data is not (currently) revealed to credit agencies.

(2) It's worth trying to make an offer, however modest, even at a very late stage in proceedings.

Thanks again to everyone who replied... rock on, moneysavers!

retepetsir

Why did you not start paying it back 7 years ago? £200 in interest seems like less money than it would have worked out as if you'd paid it back normally....?!

ch0pski

In answer to your question: "Why did you not start paying it back 7 years ago?"

I took the decision to prioritise paying off commercial debts (credit card and overdraft basically) and save up money to travel overseas as soon as possible instead of paying of my government loan.

When I left university I was in poverty with zero income and I accrued £3,500commercial debt. I worked hard and paid it all off, saved a few thousand, then decided to go travelling for a year.

A year later I returned and again had commercial debts of a few thousand. So I set about paying them off and saving up again, which I did to the tune of £5,000.

Then I went travelling AGAIN (2 years in total) and AGAIN had to pay off the commercial debts of a few thousand when I got back.

Now I've had enough of travelling (for the time being!) and want to pay off my Student Loan so I can take out a mortgage.

£200 in interest and fees seems a fair price to pay for the luxury of being able to take off and see the world... without having my student loan chomp in to my travel savings. :j

My view: don't be pushed around by the SLC, string them along as much as you can and get on and enjoy your life :T