Debts over 6 years old - DWP

SandyCheeks_2

Ive had a letter from the Dept of Work and Pensions about a loan I had from the Social Fund in 2004. I had genuinely forgotten all about it, it was a loan that I took out as at the time I was in a mess. I got a job the same year so they stopped deducting it from my dole. Apparently I still owe £320.00 on it , the last time they contacted me about it was in 2005 when I made a few payments but then obviously forgot about it again. They say I last paid an amount in February 2007 but I think their dates are wrong, as if I had been paying from the 2005 through to 2007 then surely I would’ve paid it all off. I cant even remember how much was borrowed in the first place
Anyway im sure Ive read somewhere that after 6 years any debt is statute barred? And if I acknowledge this letter I will in effect open the debt up again, is that correct? There is also nothing about this debt on my Credit Report. Letter says they will take me to court if payment is not made.
I know that morally I should pay it but I admit I would like to get away with it if I can. Should I just suck it up and offer to pay instalments or just ignore it and hope it goes away?!

Mimi_Arc_en_ciel

This might be better asked on the DFW board.

The stature barred does apply to DWP but you should really send them a "prove it" letter and ask for an account breakdown to find out whether there was a payment in 2007, if there was a payment from June 2007 onwards then it wont fall into the 6 years stature barred category yet.

SandyCheeks_2

Thank you, it does say last payment was made in February 2007 although as i say i think they have year wrong and it was earlier. I wasnt sure if statute barred applied to DWP or not! thanks for your help will repost on DFW

rogerblack

SandyCheeks wrote: »

Thank you, it does say last payment was made in February 2007 although as i say i think they have year wrong and it was earlier. I wasnt sure if statute barred applied to DWP or not! thanks for your help will repost on DFW

Statute barring partially applies.
They cannot enforce through the courts debt that is over 6 years old (since the last payment, or acknowledgement in writing that you owe the debt) (with some exceptions).

However, they can deduct it from most future benefit payments - if you don't claim any at the moment, they can end up taking it off your pension.

fermi

The debt would likely be statute barred, even if you believe their dates.

However, being statute barred would only block them taking action via the courts to recover it. They could still ask you to pay, or deduct from any ongoing/future benefits.

The loan will not appear on your credit report.

Up to you whether you pay or dispute it.

Mimi_Arc_en_ciel

rogerblack wrote: »

Statute barring partially applies.
They cannot enforce through the courts debt that is over 6 years old (since the last payment, or acknowledgement in writing that you owe the debt) (with some exceptions).

However, they can deduct it from most future benefit payments - if you don't claim any at the moment, they can end up taking it off your pension.

If the OP could prove it wasnt a legal debt would they still be able to take it?

fermi

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=25_liability_for_debts_and_the_limitation_act

Benefit overpayments and social fund loans

The Limitation Act says that the limitation period for benefit overpayments and social fund loans is six years.

The cause of action (when the limitation period starts running) for benefit overpayments, is when a final decision is made on the overpayment. This is most likely to be a final decision by a local authority, the Department for Work and Pensions (DWP) or a tribunal.

For social fund loans, the cause of action is when the loan becomes due for repayment.

Information To recover overpaid benefits, the DWP and local authorities can use the normal county court route. There is also a fast-track process of registering the debt in the county court, as if it were payable under a county court order. If this happens, phone us for advice.

If the local authority or DWP tries to issue a county court claim against you for an overpayment of benefit, and you think it is statute-barred, you can put in a defence. Phone us for advice.

However, if you are getting ongoing benefits, the DWP or local authority can take money directly from your benefit to repay overpayments. This is a complicated area, and the law may soon change.

antrobus

Mimi_Arc_en_ciel wrote: »

If the OP could prove it wasnt a legal debt would they still be able to take it?

The Limitation Act simply prevents the DWP (or anyone else for that matter) from using the courts to enforce payment. It doesn't (at least as far as England & Wales are concerned) change the fact that the debt exists.

Since most people will, at some time, retire and become eligible for a state pension, the DWP can almost always get its money back.

rogerblack

Mimi_Arc_en_ciel wrote: »

If the OP could prove it wasnt a legal debt would they still be able to take it?

In principle - no.
However.
Proving that it's paid off may be extremely difficult, especially given the fact that the DWP may hold now very, very limited data on it.

Practically - what happens is that you start claiming benefit - and you notice a few pounds a week knocked off.

What happens then is problematic - you can appeal the decision to reduce your benefit - on the grounds that it's incorrect.
If you can actually prove that it is - you will likely win at the tribunal in most of a years time.
If you can't - then the tribunal is not required that the DWP prove their case 'beyond reasonable doubt' - just on the balance of probabilities.
And at that point, you're basically at the point where it's if the tribunal believes you.

McKneff

fermi wrote: »

Rubbish. They can be statute barred like any other loan.

I'm amazed you posted such, as you well know it to be incorrect. --> https://forums.moneysavingexpert.com/discussion/3928075

So I made a mistake, we all do.
Why do you feel the need to trawl through old posts to prove your point.

There really is no need to be so rude. I could sink to the same level but I will desist

Mimi_Arc_en_ciel

AH ok.

Might want to reconsider not paying now then OP - state pension probably wont be much and you will struggle later in life