Bankruptcy and Social Fund Loans????? Help appreciated.

MaisyDaisyDoo

Hi,

I'm new to all this so please bear with me if I ramble on at all.

I declared myself bankrupt in October 2007.

A couple of weeks ago I received a letter from the DWP saying that I owed £442 but no explanation as to why or what for.

I called the number on the letter and have been told it was for a social fund loan I took out in January 2008. I told them I had declared myself bankrupt but the guy on the phone said that social fund loans don't count in bankruptcy.

I thought all debt was included. I can't remember taking this loan out or owing anything to the benefits agency. I haven't claimed any sort of benefit for over 7 years now. I've written off and asked for some sort of proof or explanation regarding this loan.

My main question though is does anyone know the answer regarding social fund loans and bankruptcy? As this alleged loan was taken out while I was declared bankrupt then I would of thought it was included as debt?

Any help appreciated,

thanks

fermi

If you took it out after you were declared bankrupt then it would not have been covered by the bankruptcy.

TheGardener

As Fermi says, if the loan was taken out after BR then it would not be included in BR. However, if the loan was taken out more than 6 years ago and there has been no attempt to collect/acknowledge the loan, might it be statute barred anyway?

fermi

It could be, as

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

However, DWP can still deduct from future benefits.

The can now since 2013 also - I think for social fund loans - apply for a Direct Earnings Attachment to have money deducted from wages. That new process doesn not reuire a court order, so can be used on statute barred debts.

National_Debtline

fermi wrote: »

The can now since 2013 also - I think for social fund loans - apply for a Direct Earnings Attachment to have money deducted from wages. That new process doesn not reuire a court order, so can be used on statute barred debts.

Just to confirm, they can and do use Direct Earnings Attachments for old social fund loans.


James
@natdebtline

fermi

Thanks. Couldn't remember if it was restricted to specific things, or had more general applicability.

single+2angel

I had a Budgeting loan for over £ 600 at the time I went bankrupt (Sept 2008). My OR insisted I continue to pay it after my BR date. DWP took it out of my Income support weekly.I finished paying it off 3 months after my Early Discharge letter. It was never included in my Bankruptcy.

fermi

It should have been.

The law only changed to exclude them in 2013.

single+2angel

It's so nice to see you (Fermi )still on this board. Without you(and few others) I would not have been able to go through with the BR. 7 years on You ARE still my hero. The last few years, when I felt down on my luck I always looked for your posts. I will never be able to thank YOU enough. Please keep up the brilliant work you do.

fermi

single+2angel wrote: »

It's so nice to see you (Fermi )still on this board. Without you(and few others) I would not have been able to go through with the BR. 7 years on You ARE still my hero. The last few years, when I felt down on my luck I always looked for your posts. I will never be able to thank YOU enough. Please keep up the brilliant work you do.

Thank you. :cool:

Actually they may have been able to deduct while you were undischarged back then. What they could do and when kept changing with various High Court rulings.