Employee loan repayment

AnnieB2018

Let’s look at practicalities - if you make no promises about decent repayment then they will keep your last paycheque…it is very possible if you are leaving on bad terms. I imagine that won’t cover the whole £3k so you will still be paying them back for another year at least. How will you cope for a month or even 6 weeks with no money (6 weeks if the new job has a different salary pay date)?
If there is any chance you can get a bank loan or a new credit card you need to apply for it now while you still have a history of monthly salary going into your account.

sourcrates

You can still leave and take the new job, just because they say one thing, it does not mean you have to comply with that.
It would be fairly certain they would keep your last salary payment, to cover as much of what you owe as possible, the rest of the outstanding balance, they would have to go to court for, or agree terms, just like any other debt.

So the question, as asked above, is can you manage till your first payday at your new job?

pollyv

Because of the company close down and Xmas, we get paid in advance so that won't be a problem. What I'm really worried about is the veiled threats that are coming about what will happen if I leave without paying in full.
I'm caught between a rock and a hard place. If I leave and don't pay in full I'm worried about courts and bailiffs, even though I offered and intended to keep up payments after leaving. If I stay and turn the new job down I'm turning down better money and a chance of making something better out of my life and staying with a company that has not been very nice to me 

Soot2006

What would a court do? Confirm that you need to repay it, which you already agree.  And then .... they would most likely set up a repayment plan in line with your earnings - which you already have.

The company is worried that you will default on your debt, which is understandable from their perspective, but if I were you, I'd continue paying off the loan with everything you possibly can throw at it. If you get a small claims letter, you respond "Yes I acknowledge this debt and there is the repayment plant, from which I have never deviated".  If they pursued anyway, you make sure you have the evidence of repayment ready to show. The speed the courts are going, you may well have repaid the loan by the time anyone even reads the case.

All this is said in the context of you actually paying what you can rather than a token amount. They can't get blood from a stone. Unless there's blood inside the stone.

FreedomBringsPeace

You will have a copy of the agreement and/or info in the staff handbook. If you are getting a better salary im assuming you can make extra payments to clear the debt faster? Personally i would try whichever way to clear any debt with an old employer. Them not doing right in promoting you has nothing to do with the fact you have a debt and agreed to their terms and conditions. It may be unlikely that that they will take you to court if you continue making payment. But, however your final salary may be taken towards the payment. Whatever promise you make to pay id suggest you put it im writing. 

sourcrates

Soot2006 said:

What would a court do? Confirm that you need to repay it, which you already agree.  

       pollyv said:

 What I'm really worried about is the veiled threats that are coming about what will happen if I leave without paying in full.
I'm caught between a rock and a hard place. If I leave and don't pay in full I'm worried about courts and bailiffs.

That is how agreements are enforced, through the courts, unless voluntary repayments continue, but the company don`t seem keen on that option, so the OP can likely expect enforcement action in the form of a court claim, they may just do this out of spite, or they may not.

If that happens, as long as you stick to affordable payments agreed with the court, no further action can take place, so no bailiffs.

You may find they will quite happily agree to monthly payments from you once things have settled down.

Herzlos

They can't stop you leaving and taking another job, and will just need to take any money back via the courts which you can arrange with them at a rate the courts feels is suitable.

As said, your only immediate risk is that you'll likely get any future wages reclaimed, and your credit rating may take a hit later if court goes badly for you, but given you've got no other borrowing avenue already I don't think that's worth worrying about.

Can you afford to get by until your first paycheck at the new place, assuming you receive no more wages at the old place? They new place may be able to give you some wages in advance.

Exodi

pollyv said:

Hi, thanks for all your replies.
I will request a copy of the agreement I signed. It was a loan for car repairs, described as an interest free employee loan. I spoke to the MD yesterday who said it is a perk for employees only and needs to be paid in full before leaving. I said I'm sorry I just haven't got it but I honour my debts and will continue the repayments after I've left until fully paid, to which I was told that is unacceptable. 

What is your weekly repayment out of interest? If it's less than £50 a week I can understand their reluctance.

From their side, as soon as you leave, they lose their leverage. They become completely reliant on you keeping your word, else needing to waste the time and money pursuing you through the courts.

I'm sure you do 'honour your debts' but unfortunately a significant amount of people don't. Many on these forums may even advice you to hang the employer out to dry if the agreement has any questionable terms that can be used to wriggle out of your obligations.

You seem quite steadfast that there's categorically no way you can raise the funds anywhere else (though I understand why you probably don't want to pay interest on the current interest-free loan)

TripleH

I guess you pay £250/ month?

Do you need the season ticket for your new job or can you redeem the unused portion to help clear part of the balance?

Does the new job provide a season ticket loan so you get new job to pay a lump sum to old job?

Ebe_Scrooge

TripleH said:

I guess you pay £250/ month?

Do you need the season ticket for your new job or can you redeem the unused portion to help clear part of the balance?

Does the new job provide a season ticket loan so you get new job to pay a lump sum to old job?

It's not a season ticket loan, as stated by the OP:

pollyv said:

I will request a copy of the agreement I signed. It was a loan for car repairs, described as an interest free employee loan.