Maternity Pay Debt . . . Fermi, can you help?!?!

compulsivespender79

Me again, but I'm really stuck with this one.

I owe my previous employer at the moment £500 for company (not SMP) maternity paid to me; because I didn't return to work with them I have to repay that money (contractual stuff, I don't have a problem with having to pay them back). I do have questions about it as follows though.

I am on a DMP with CCCS - they have not included the Mat pay as a 'creditor' because they are not sure that it should be there. When I first hit financial difficulty I wrote to my former employer asking to reduce the payments from £100 a month to £50 a month. They ignored the letter, but I reduced the payments anyway. They are sending me letters threatening 'debt recovery measures' and 'legal action'. But what action can they legally take?
I now want to reduce the payments further to £25 a month, because if my DMP creditors see my former employer getting 'favourable' treatment I know they'll (understandably) kick up a fuss, and probably won't be as amenable to the DMP as they could be. How does contractual maternity pay debt work? Can I legitimately offer them reduced or token payments in the same way that I would 'true' creditors?

I'd be really grateful for any advice, because I desperately don't want to screw up my DMP.

Many, many thanks in advance

CSx

fermi

lol. I know zilch about maternity pay.:o

Firstly, I suppose that sort of debt doesn't 'scan' with CCCS because it's not technically a 'credit' debt.

However, since it is not a 'credit' debt the company are not entitled to mark your Credit Reference Files in the way a normal 'creditor' could. Neither can any DCA that they pass it on to as far as I know. So that's a good point.

In theory you can reduce your payments to them to whatever level you choose.

Their only recourse is to take you to court for a CCJ. If they did that, then you could ask the court to set a monthly payment based upon what you could genuinely afford. That would one calculated on a 'pro rata' basis with your other creditors on the DMP.

So really, they may complain, whine and make threats, but there is not a lot they can do.

Best to have another chat with CCCS really. They should be able to confirm what I just said.

EDIT: If you are going to make an offer of payment, I would do it 'pro rata' with your other debts (i.e. in proportion to the amount owed).

State that this is what you have done. That way they will know they wouldn't get any more by going to court.

tara66_2

Hi,

Were you in a trade union where you worked? If so they would sort this out. Is there anything in your contract that states a timetable for repayment? If not then I don't think it unreasonable for you to pay it at a reasonable rate that you can afford.

However I don't see why CCCS don't think it should be included in your plan as it is a debt that you are bound, by your employment, contract to pay. The legal remedy for the recovery of the debt is applying for CCJ. Whilst this is not the end of the world given you (like me) are entering a DMP, it is hassle you could do without, so I would have another word with CCCS about including it if possible, even tho it isn't a 'credit' debt it is an overpayment of salary.
Sorry this is a bit rambling.
Tara

compulsivespender79

Thankyou both.

Some very interesting points raised there!

I wasn't a member of a trade union when I worked there (am now though!)

I think I will work out a pro-rata payment to them in line with my other creditors. I'm certainly not worried by the threat of a CCJ, but I'd still like to know if that's the worst they can do!

tara66_2

Is there something particular you are worried about because I can't see anything worse that they can do and in the grand scheme of things its not a fortune in any case so really they are being very awkward.

I think the pro rata payment is the right approach and they aren't entitled to any better treatment than the rest of your creditors. Are you worried it might affect a future reference or anything?
Tara

compulsivespender79

I'm just worried that they may have more powers than a normal creditor. They threaten 'debt recovery measures' (bailiff??) and 'legal proceedings' if I don't pay what there asking. Part of me thinks, well, what they're saying goes against OFT guidance and is classed as unfair business practice isn't it? But then another part of me knows that they aren't a true "creditor", so do they have different powers?
I just want to be clear, before I go putting my size 5s in it, what my rights are.

fermi

The only thing they can do is try for a CCJ.

The OFT guidance only applies to holders of a "Consumer Credit Licence" when an account is in default.

General laws protecting you from harassment still apply though, but these are difficult to prove and enforce.

compulsivespender79

Thanks so much Fermi. If they worst they can do is a CCJ, then I'll go ahead and offer them pro-rata payments in line with my creditors.

As ever, this forum is an invaluable resource!!!

CSx

compulsivespender79

Just an update;

I wrote to my former employers (again), advising them of my DMP. They have written back to me saying that they are putting any action 'on hold', and that they will wait to hear from CCCS. CCCS were amazed that they want to be included on the DMP, but they are now sitting *happily* with my other creditors!
So, nearly a fairytail ending!

CSx

fermi

Not quite "fairytale" no, but I'm glad you've got it sorted with CCCS and that they are going happily into the DMP.