student loans & bankrputcy nightmare- need advice

NekoZombie

authornick wrote: »

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

I think the answer lies in what the OP has already stated. he called them about the debt last year because he wanted to arrange re-payments. I don't think this debt is statute barred, unfortunately. For me, the key is the debt has gone to a DCA, and arguably can now be included in bankruptcy.

fermi

Acknowledgement of a debt under the Limitation Act is normally required in court to be acknowledgement in writing or by a payment by the debtor. Phone calls don't count, even (as far as I've ever seen) if recorded.

Plus, once a period of six years has gone by without acknowledgement, the debt is "statute barred" and remains so. An acknowledgement outside the limitation period should not start they clock ticking again.

But professional advice should be taken before the OP states they will not be paying the debt for those reasons.

authornick

thanks everyone- It was a great idea about statutory barring the debt, but since I've been in touch with the SLC last year, I don't think I can qualify. However, i'd like clarification on whether the debt has actually been sold to the debt collection company and can be included in the bankruptcy claim. It's certainly being collected by them, and s I understand it, the debt collection company can't pursue a debt tha they haven't bought for themselves, but can anyone give me an update on this legal point? I'm looking for wiggle-room here folks!

fermi

The Student Loan Company most definitely do not sell their loans to debt collecting agencies.

A DCA can either buy (legally be "assigned") the debt, or they act as an "agent" for the original creditor. Those are both quite lawful.

If I was you I would get in touch with the SLC and make a bit of a fuss and complain about the "tactics" that the agents they have employed are using. The SLC should have a complaints procedure, so make sure you request a copy of that. Remember, they are responsible for the conduct of their "agents".

By doing that (and annoying the DCA) I managed to get the SLC to take mine back. They are much more reasonable, and I had a perfectly pleasant chat with them last week to sort mine out for another 3 months.

It's worth a try anyway, and hopefully it will work for you as well.

baby_balloon

sorry to hijack this thread but im interested in this as i havent acknowledged my student loan in about 5 years... i never receive letters and as im self employed and dont earn enough, nothing is taken from my wages. What happens if a debt is statutory barred? if i carry on ignoring them will this mysterious statutory thing happen to my loan?! Thank you!

fermi

baby_balloon wrote: »

sorry to hijack this thread but im interested in this as i havent acknowledged my student loan in about 5 years... i never receive letters and as im self employed and dont earn enough, nothing is taken from my wages. What happens if a debt is statutory barred? if i carry on ignoring them will this mysterious statutory thing happen to my loan?! Thank you!

When did you start Uni?

Are you under the old system where you are meant to defer repayments every year if you don't earn enough?

Or are you on the newer ones that would be deducted straight from your wages if you earn enough on PAYE?

The newer type apparently can't be statute barred.

Factsheet | Liability for Debts and the Limitation Act

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.

baby_balloon

um... i think im the new one where they take it direct from wages. i was there in 1998 - 2001. oh poo, i got all excited then! thanks tho fermi

authornick

Hello again, and thanks fermi for putting me right on the matter of who owns the debt. It's looking like I can't include the student loan debt when filing for bakruptcy, but I'm holding out hopes that the actions of recovery of the debt by the DCA might be statute barred- the student loan debt covers my time at university-, 1992-1996, and as such is counted as one of the 'old-type' student loans. I deferred it up until the time of illness by annually completing and returning the standard deferment form along with apprpriate financial statements, then missed a deferment (you have 12 weeks to return the form), and ended all communication with the student loans company for approx 40 months until I phoned them up on a foolish whim. I have since had the interest frozen by the SLC (about £485) by deferring it with the standard form, but the debt itself was already in the hands of the DCA and is therefore still owed and is disputed by me. . but Also, it is for less than £5000 which seems to be important for some reason or other. Can anyone tell me why this matters?

Incidentally, i've been looking on the net for information on the debt collection agency itself- Clarke Buchanan & Wells. Found this:

http://www.consumeractiongroup.co.uk/forum/general-debt-issues/47691-advice-needed-please-buchanan.html

on another consumer forum. Turns out that CB&W may not even have the right to handle my personal data in the first place! Take a look and tell me what you think- do I have a chance of getting the SLC to take back the debt and turn it into a deferment again, on the basis that their DCA is operating without a legal license?

fermi

Don't think you can get them on their "data controllers" registration.

That link refers to info over a year old, and even if there was an error there (which I'm really not sure there was), the "data controller" for Buchanan Clark and Wells (or BCWGroup) now tallies perfectly with their registered address.

From Companies House (webcheck):

Name & Registered Office:
BCW GROUP PLC
24 GEORGE SQUARE
GLASGOW
G2 1EG
Company No. SC223606

From the Data Protection Register:

Registration Number: Z9810407
Date Registered: 12 March 2007 Registration Expires: 11 March 2009

Data Controller: BCW GROUP PLC

Address:

24 GEORGE SQUARE
GLASGOW
G2 1EG

Other Names:
BUCHANAN CLARK & WELLS

---

Who mentioned the £5000 figure and why I wonder?

As I said, think your best bet is to get the SLC to take it back. Or just ignore BC&W's whining and just pay £5 per month whatever they say.

The SLC won't budge on back dating deferment more than 3 months from when you contact them. I know, I've tried.:rolleyes: