student loans & bankrputcy nightmare- need advice

authornick

Hi there, I'm 33, based in Norfolk,and am on incapacity benefit for depression, following a nervous collapse in 2004. I've built up a squalid little mountain of post-student debt, starting with my bank's graduate loan and then taking in a Halifax credit card that I survived on when I quit my part-time job to look afer my father (now deceased). I'm seriously thinking about filing for bankruptcy to clear these debts and get a fresh start, as I lay awake worrying about them, and have fallen into the trap of not daring to open up letters from the various debt collection agencies. As I'm on a minimal income and live in a furnished council flat, and have no assets or savings, I'm hoping that bankruptcy is the answer.

BUT, and it's a big but, ther's still the matter of my Student Loan from my uni days (1992-1996). During the long term sickness of my father, and the period following his subsequent death, I missed my deferment period. I havemissed many since, but in an effort to get my life back on track, I phoned the Sudent Loan Company last year, with the foolish notion that since my income had at no time crept beyond 5K a year, i should be able to sort out a return to deferments.

Big mistake on my part- the SLC informed me that they are no longer dealing with my case, and have referred it to a debt collection company called Clarke Buchanan & Wells (CB&W). The amount I owe in total, according to CB&W is now £4,500. They phone me each week and send letters demanding I pay the full amount. The advisers on the line are uninformative, threatening, and generally unhelpful. I have made an offer to pay of £5 per month, but they want a minimum of £40 per month, which is totally impossible.

Since the SLC are no longer handling my case, does this mean the debt's been sold to CB&W, the debt collection agency? And if it dos, then does this mean that I can include this debt when filing for bankruptcy?

If the Student Loan Debt is still somehow exempt, how do I get CB&W to accept a minimum repayment offer of around £5 per month, which is all I can really afford? Is there a minimum amount they have to accept, or is it up to how nasty they feel on the day?

I need answers to all these questions before I can decide if bankruptcy is the way forward.

Also, are there any charities or discretionary grants/loans available to help with the £500 costs of filing for bankruptcy? I've downloaded from this site the form to apply for a refund towards the cost of the bankruptcy order (£150)- but can I get a decision on how much if any refund might be awarded to me before budgeting for the full costs of filing? do I have to send the form to the court as I file for bankruptcy, or can I send the form in advance?

Please help, this is a minefield and I'm terribly unsure where to put my feet...

I initially posted this in a different forum, but someone suggested it might be more suited to thiis forum...

Thanks, a very confused Nick

Scarlett.1974

Hi Nick and welcome,

That's a very interesting one you know. As we know, student loans are not included in BR, but the fact that it's now gone to a DCA........

You should call one of the free debt charities for advice on this (you need to do this anyway, the judge will ask you if you've taken professional advice ), they should be able to help you (I'll post the links and numbers in a minute).

I could be wrong here, I'm sure someone will correct me if I am, but I think the only way you'll get the DCA 'off your back' (so to speak) will be if they do decide to take you to court over the debt and you get a CCJ. The court will then see how much you can afford to pay back and that amount will then be set.

IB is not one of the benefits that automatically excludes you from paying the court fee unfortunately, BUT you might be eligible under the 'total household income' clause. I'll find some links for that in a minute too.

Scarlett.1974

Borrowed from Wherediditallgo's sig, I'm sure she won't mind:

You can get professional & impartial advice on debt from several charitable & 'not for profit' organisations. Advice given is free, so it'll be given with only your best interests at heart. Contact:

Your local CAB Office - ask to speak to a 'money advisor' *** Consumer Credit Counselling Service (CCCS) - 0800 138 1111 *** National Debtline - 0800 808 4000 *** Insolvency Helpline - 0800 074 6918

Scarlett.1974

If you click on this it should get you to the ex160 form

http://www.hmcourts-service.gov.uk/c...orms/ex160.pdf
http://www.hmcourts-service.gov.uk/c...rms/ex160a.pdf

One is the form, the other is the guidance.

Here you are, thanks to Tigerfeet

You take the form with you on the day you go to court to declare your BR.

G-G_4

When did you last pay anything on the student loan?

authornick

Hi GG,

I've never payed anything on the student loan- my income threshold has been well below the amount required to start repayments... That's my point really- I don't really see how they can expect me to repay them now, but still they are most definitely on my case and seem ill-disposed to exercise leniency, or even humanity... If I could just talk to a real human being I could probably present my case.

debt_doctor

Hi,

It would appear to me that the student loan debt is statute barred. Please see national debt line info below;

Student loans

Student loan agreements are simple contracts and this gives the Student Loans Company (SLC) six years from the date you last paid or acknowledged the debt to go to court to enforce the agreement. There are two sorts of student loans and different rules apply depending upon when you took out the loan.
Old style student loans
Old style or 'mortgage' student loans are consumer credit agreements. Payments cannot automatically be deducted from your wages. The SLC has to go to court before they can enforce the debt against you. This means that the Limitation Act can apply if you have not paid or acknowledged the debt for over six years.
WARNING
Asking for the loan to be deferred could count as acknowledging the debt and start time running again.
New style student loans
From September 1998 new style or 'income contingent' student loans include rules to say that repayments are automatically deducted directly from your wages or through your tax return if you are self-employed. This means that the SLC are still allowed to take money from your wages for a loan over six years old as they do not have to go to court to do so.
Phone us for advice 0808 808 4000



So you could go BR with all your other debts and never be persued for the student loan debt under limitations act.

DD

fermi

When was the last time you deferred payment of the loans?

Have you written to SLC at any other time (and if so when) that could be taken as acknowledging the debt?

G-G_4

Thanks Debt Doctor, that is what I was getting at..

If you have never paid it then I would also agree that it is possibly statute barred..

if you search on here for info about it then that should help you understand it..

x

fermi

Check to see if the debt is "Statute Barred" first.

But if it isn't statute barred, then just make yourself a complete pain in the "rear end" with BC&W and the SLC.

The SLC passed some of mine on to Capquest.:eek: But I got the SLC to take it back.:D

Once it's back with the SLC they are quite easy to negotiate with.

debt_doctor

Good luck with that, if there has been any 6 year period that you have not written to them or made a payment then the limitations act should apply.

Best

DD