Letter about repayment of loan

RHKerr24

About 5 years ago my wife and I returned from Spain having spent 3 years there in my wife's apartment that used to belong to my wife's mother. We had no money and no job and had to stay in a friends spare room until we could rent somewhere. We applied for job seekers allowance but they told both of us that as we had a second home in Spain we weren't entitled to anything, even though both of us worked before we went to Spain and I worked and paid tax etc in Spain. They eventually gave me an emergency loan and told me they would take payment from my benefits! I had forgotten about this but have now received a letter saying they have put this in the hands of the DWP debt collecting agency and i will hear from them about repayment. Can they do this?

NYM

RHKerr24 wrote: »

About 5 years ago my wife and I returned from Spain having spent 3 years there in my wife's apartment that used to belong to my wife's mother. We had no money and no job and had to stay in a friends spare room until we could rent somewhere. We applied for job seekers allowance but they told both of us that as we had a second home in Spain we weren't entitled to anything, even though both of us worked before we went to Spain and I worked and paid tax etc in Spain. They eventually gave me an emergency loan and told me they would take payment from my benefits! I had forgotten about this but have now received a letter saying they have put this in the hands of the DWP debt collecting agency and i will hear from them about repayment. Can they do this?

Do you mean can they expect you to repay it -or - can they take the payments from current benefits ?

Either way, I believe they can.

Poppie68

It was a loan therefore it needs paying back, they will deduct it from current benefits if you are claiming or those that are not, are now finding the dwp and hmrc are going after payment through attachment of their income.

midnight_express

The clue was in the word "loan".

Mersey_2

Yes, debts can be pursued - ultimately - in the County Courts for upto 6 years, although of late, I've heard of people receiving letters from the DWP re some historic debts too. I assume all who received emergency loans received letters.

Marshmallow82

RHKerr24 wrote: »

About 5 years ago my wife and I returned from Spain having spent 3 years there in my wife's apartment that used to belong to my wife's mother.s?

Do you actually own the apartment or does the MIL?

missymish

I had an emergency DWP loan nearly 9 years ago, by the time by benefits were sorted out I had a new job. I assumed they had taken the loan out of my backdated benefits and thought no more of it.

I got a letter in December 2014 regarding this saying that they would use a debt collection agency if I didn't respond within 31 days, what with Christmas and one thing or another the letter went to the back of the to do pile, I then received a letter in January saying that I they had sent a letter to my employer for the money to be reclaimed through my wages.

So in short yes they can claim the money back the loan I had was around £200, I think chasing something that is 9 years old is a bit of a push but if it is owed it is owed.

I don't know why it has taken them so long, I have had the same address for the past 7 years, I claim tax credits and housing benefit and I am on the electoral roll so I am not difficult to find!

missapril75

@missymish

Good heavens, yours is the first time I've seen a post from someone about an old debt surfacing and everything said sounds reasonable and believable.

:T

timbo58

I've seen a few threads like this recently regarding emergency loans etc being reclaimed after umpteen years.

I think if it happened to me I'd just be thanking my lucky stars about the fact the repayment doesn't include interest, admin charges, penalties etc.

Unless it does?
Perhaps it should?

[Deleted User]

I had to pay back an emergency loan paid to my ex when he was single.., but because he'd since moved in with me, and at the time was receiving Jobseekers allowance of £40 a week through my income support - the money from the loan came out of my income support. I hope that makes sense. To say I was paying for the 'privilege' of having him living with me was putting it mildly lol.

This also was a crisis loan taken out some years before.

Nothing I could do.., I had him living with me (not for much longer at that stage).

Witless

missymish wrote: »

I had an emergency DWP loan nearly 9 years ago, I assumed they had taken the loan out of my backdated benefits and thought no more of it.

I think chasing something that is 9 years old is a bit of a push but if it is owed it is owed.

I don't know why it has taken them so long, I have had the same address for the past 7 years, I claim tax credits and housing benefit and I am on the electoral roll so I am not difficult to find!

Not being in any way critical but I think the clue is in the bits I underlined. (As I say, not critical of you, but hopefully of help to others)

When you got notification of your backdated benefits was there anything to suggest the loan had been deducted?

When you moved did you inform the Benefit Paying Office of your new address?

There is a degree of inter-communication between government systems but they're not directly linked: AFAIK the main communication is benefits driven - HMRC will communicate with DWP about WTC/CTC vs JSA/IS etc and vice versa so if you weren't on benefits that might be how you slipped through the net.

At one stage small benefit overpayments (up to about £60?) were written off* but I think all loans were/are pursued.

The system seems to be less forgiving now in that a failure to respond (which usually meant repayment by agreed installments) results in deductions from earnings of a non negotiable ammount. My understanding is that DWP aren't bound by the 6 year rule as they don't need a court order for either deduction from earnings or deduction directly from benefits.

There also seems to be a 'chase up' of old loans: a family member recently received a letter (not from their local benefit office) about a 10 - 12 year old loan that had a couple of missed payments in similar circumstances to you (bouncing on & off benefits due to short term work) but which was tottally cleared years ago: the letter stated the date/ammount of the last payment and confirmed that the loan was cleared. Presumably they were checking up on loans that were at one stage unpaid/defaulted and taking the appropriate action - formal closure or pursuit.

One piece of advice is to make sure you get a 'loan repayment complete' letter (as mentioned above) and keep it! Not always possible to physically keep it, but scanned as a PDF onto your PC/back up flash drive could be invaluable.

* They may still be at present, though I can see pursuit of them being the next stage.