Student Loans and statute barred debt help

[jasperpad]

hi Just so you have a new brilliant update.

 

I received a letter from Link advising me that my statute barred letter was accepted and that they would not be pursuing their claim any further!

 

so go for it they can and are being beaten!

[sequenci]

Huge news!

[kurvaface]

Nice one. Considering their recent judicial hammering where the judge said that their, and mbna's behaviour was tantamount to torture, this is another nice victory over this **** of the earth company.

 

I would still ask trading standards to have a look at why the slc is still chasing statute barred debt by using these aggressive companies.

[sequenci]

They have every right to chase for statute barred debt until the debtor informs them of the statute barred status.

[jasperpad]

Hi I am not sure if I missed something, but when did you actually start to make any form of payment? Plus when did you get a letter/form from the Student Loans Company showing your first statement as they don't send these out until after the course has ended either by you or when the course has run its term.

 

so to sum up:

 

1. first statement date (if year after you left the course)

2. date of first payment

3. if either or both is before the last payment or acknowledgement

 

= statute barred!!

 

anyone agree?

 

 

Hi and thanks for the responses.

 

What the loan company is trying to say in my case is that, since the course ended in 1999 the debt did not fall due until April 2000, they say;

 

"...the Act therefore provides for a limitation period starting on the date of the first breach of the relevant contract that the non-breaching party is entitled to bring a claim for." and then "It follows that the limitation period cannot start to run unless and until such a breach occurs, or in other words (in relation to your student loan) until you failed to make a payment which was otherwise due."

 

They are saying that since the loan was not due for repayment until April 2000 (ie the year following the scheduled course end) that the relevant period with respect to the Limitation Act is from April 2000 - April 2006 (and not the date on which the contract was signed or loan received etc) , and since I acknowledged and made payments from Feb 2006 then the debt is not statute barred.

 

I am not sure whether they are correct on this point; that the relevant period begins only once a breach has occurred. However this is a moot point in my case since I withdrew from my course in 1996 and therefore the debt became liable for payment in April 1997, which clearly means there has been a six year period of no acknowledgment on my part.

 

If anyone can offer any further advice on these points I'd be very much obliged.

 

In the meantime I have drawn up a letter pointing out that I left the course in '96 and the debt must have then fell due in '97 and is therefore statute barred.

[greenman2011]

Hi All! I have a similar situation, I took out a student loan in 1994 and 1995 of £1,600 each, I only paid one direct debit of £50 in 1995 and I haven't had contact with the company since that time. last year they started sending me letters again which I haven't acknowledged in any way. As i'm sure my debt qualifies for the 'Statute Barred' status I wanted to know how I go about getting this recognised and getting the SLC of my back? the little fascists they are!

thanks

[Ed999]

Hi All! I have a similar situation, I took out a student loan in 1994 and 1995 of £1,600 each, I only paid one direct debit of £50 in 1995 and I haven't had contact with the company since that time. last year they started sending me letters again which I haven't acknowledged in any way. As i'm sure my debt qualifies for the 'Statute Barred' status I wanted to know how I go about getting this recognised and getting the SLC of my back? the little fascists they are!

 

 

I think the obvious approach is the best: send the same letter as appears earlier in this thread, but giving the details of your loan in the relevent parts of the letter. That letter should be the only step you need take in order to get them off your back for good.

 

 

In my opinion, there has been some muddled thinking on this thread. Sorry folks! It is a simple test really: under the Limitation Act 1980, if any period of six years elapses during which the debtor has made no payment or acknowledgement of the debt, then the contract debt has become statute barred.

 

Even if a payment or acknowledgement of the debt occurs subsequently, once the debt is statute barred it doesn't revive: section 29(7) Limitation Act 1980.

 

An acknowledgement of the debt does NOT count unless it is in writing and signed by the debtor: section 30(1) Limitation Act 1980.

 

However, applying for the loan to be deferred would normally count as acknowledging the debt.

 

 

Example: You start from today - 12th June 2011 - and deduct 6 years. If you made no payment or acknowledgement of the debt after 12th June 2005, i.e. 6 years ago today, then the debt is now statute barred. If you did make a payment or acknowledgement within the last 6 years, the debt will still be statute barred if there was ANY earlier period of 6 years in which you made no payment or acknowledgement of it.

 

 

The time limit is 6 years whether the debt arises under section 5 [contract debts] or section 9 [statutory debts] in the Limitation Act.

 

Note, though, that the 6 year time limit under section 5 might not begin to run until the first demand for a payment is made: section 6 Limitation Act 1980.

 

In cases where at least one payment has been made it is probable the payment was in response to a demand within the meaning of section 6, so time will have begun to run. If no payment has ever been made, the position might be different: the loan might not be time barred even if more than 6 years passes.

 

 

 

Limitation Act 1980: http://www.legislation.gov.uk/ukpga/1980/58/contents

 

 

 

The above does NOT apply to student loans made after September 1998:

see http://www.consumeractiongroup.co.uk/forum/showthread.php?307639-Old-student-loans-95-97-98-CCJ&p=3432325&viewfull=1#post3432325

 

I'm told the limitation period for these is 12 years, not 6 years.

Edited June 12, 2011 by Ed999

[sequenci]

Oldstyle loans are CCA regulated, as such are held to simply contracts under s5. I'm not sure you'll need to worry about s6 for these.

 

Interesting about the 12 year thing for new-style loans. I didn't know that!

[Ed999]

Interesting about the 12 year thing for new-style loans. I didn't know that!

 

 

I'm not saying that it's correct, I'm merely passing on what I was told on another thread.

[sequenci]

I'm not saying that it's correct, I'm merely passing on what I was told on another thread.

 

It's worth a bit of investigation, once I'm back at work I'll take a look.

[Ed999]

For your information, the thread in which the statement was made is: can-i-use-statute-barred-on-a-1998-student-loan (where the poster in question was tiglet).

 

Delving further into this question, I see that a different answer is posted by cerberusalert at: Old-student-loans-95-97-98-CCJ

 

But yet a third answer is posted by user too.ticky at: can-i-use-statute-barred-on-a-1998-student-loan - where the poster cites the National Debtline as the source of the advice.

 

 

 

This is what tiglet said -

 

New-syle student loan cannot be statute barred after 6 years - i beleive it is 12 as they are the "mortgage" style loans.

 

Tiglet was alluding to the fact that a legal mortgage is treated as a specialty, because it's executed as a deed, and that the limitation period for a specialty is 12 years.

 

 

This is what cerberusalert said -

 

Student loan agreements are simple contracts and this gives the Student Loans Company (SLC) 6 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 or “mortgage” student loans are consumer credit agreements. Payments cannot be automatically deducted from your wages. The SLC has to go to court before they can enforce the debt against you. This means that the Limitations Act can apply if you have not paid or acknowledged the debt for over 6 years. (Asking for the loan to be deferred could count as acknowledging the debt and start time running again).

 

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 6 years old as they do not have to go to court to do so. insolvencyhelpline.co.uk/.../liability_for_debts_and_the_limitation_act

 

 

 

This is what the National Debtline said to too.ticky -

 

A student loan is a debt under statute, this means that the Limitations Act (LA)1980 does apply. The limitations period on this debt is 6 years and not 12 years. However, as this is a new style student loan, HMRC can deduct repayments directly from your PAYE even if the debt is statute barred, which only allows you to defend the matter if it is taken through the courts.

 

It will be up to you whether you want to contact SLC or wait for them to contact you. If they did find you, they could start to recover the debt through your PAYE. If they were unable to find you, there is a possibility that they may treat this as a bad debt and sell it onto a debt collection agency (DCA). If this was to happen, the DCA would then try to recover the debt from you. If 6 years have passed with no written acknowledgment and no part payment you can then use the statute barred argument. If the DCA were to start court action, this can be used as a defence, however we would recommend that you get legal advice and take into account the additional costs that may be involved if your defence is unsuccessful.

 

 

 

So we have tiglet saying it is a Specialty under section 8 of the Limitation Act; we have cerberusalert saying it is a Contract debt under section 5 of the Act; and too.ticky and the National Debtline saying it is a Statutory debt under section 9 of the Act. A nice, even-handed spread!

Edited June 14, 2011 by Ed999