Shool Fees - Charity Status Question

Sorry if this is the wrong place to post - please advise/move as necessary.

Not looking for sympathy - just advice.
Hubby (was a high earner) has been off work for nearly 2 years due to illness. Critical Illness insurance wont pay out. As a result we are in arrears with school fees for £12,000 (we are £50,000 in debt in total, excluding the mortgage).
The school have told me that because the school has charity status, the money that we owe is 'technically' classed as a loan and therefore breaches the charity code and school can get in trouble for 'loaning' this money. Is this correct?

Can the school force us to sign a secured loan agreement against our house to cover the arrears? (which is what they are proposing)

Is there any other option - we do intend to pay off the fees in full but this will be over a number of years.
(School allowed us to keep our kids going to the school, even though we reduced our fee payment considerably over the last year. Eldest boy has left this summer but youngest boy will still be at this school for 2 more years but on 100% scholarship so the school are being quite good to us to avoid disrupting The Boy's school career.)
I am dealing with this on my own, as due to Hubby's illness, I can't tell him about this additional money worry as he is still not 100% and it will cause him additional stress and I don't want him back in hospital again. Any help gratefully received.
DMP launched 04/07/17 left to pay = £14,238.79 (£16,982.82 original debt.) Thanks to MSE & all you wonderful Forum Peeps!:T

Comments

  • elverson
    elverson Posts: 808 Forumite
    Have you heard of state schools?
  • Undervalued
    Undervalued Posts: 8,813
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    edited 3 July 2017 at 10:10AM
    purplepaws wrote: »
    Sorry if this is the wrong place to post - please advise/move as necessary.

    Not looking for sympathy - just advice.
    Hubby (was a high earner) has been off work for nearly 2 years due to illness. Critical Illness insurance wont pay out. As a result we are in arrears with school fees for £12,000 (we are £50,000 in debt in total, excluding the mortgage).
    The school have told me that because the school has charity status, the money that we owe is 'technically' classed as a loan and therefore breaches the charity code and school can get in trouble for 'loaning' this money. Is this correct?

    Can the school force us to sign a secured loan agreement against our house to cover the arrears? (which is what they are proposing)

    Is there any other option - we do intend to pay off the fees in full but this will be over a number of years.
    (School allowed us to keep our kids going to the school, even though we reduced our fee payment considerably over the last year. Eldest boy has left this summer but youngest boy will still be at this school for 2 more years but on 100% scholarship so the school are being quite good to us to avoid disrupting The Boy's school career.)
    I am dealing with this on my own, as due to Hubby's illness, I can't tell him about this additional money worry as he is still not 100% and it will cause him additional stress and I don't want him back in hospital again. Any help gratefully received.

    No, they can't force you to do anything retrospectively regarding the outstanding balance.

    What they can do of course is pursue you through the courts for what is an unsecured debt.

    Also they could refuse any further "business" from you and cease to educate your child although the terms of the scholarship may complicate this..

    Obviously they could offer you a secured loan as an alternative. Before securing a debt with a charge on you property you would have to receive independent legal advice. Assuming it is in both your names your husband would have to agree.
  • silvercar
    silvercar Posts: 46,755
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    Can the school force us to sign a secured loan agreement against our house to cover the arrears? (which is what they are proposing)

    If they can't offer loans, they can't offer secured loans!
    Is there any other option - we do intend to pay off the fees in full but this will be over a number of years.

    Keep reiterating this. You may be able to agree a charge on your property rather than a secured loan. They couldn't repossess a charge on the property, but would get the money on sale. A secured loan puts your home at risk of you don't keep up with agreed payments.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • pogofish
    pogofish Posts: 10,852
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    Surely the Charities or main MRF forums are the more appropriate places to ask?
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