Limitation Act

[CYNthesys]

Does anyone know if Student Loans are exempt from time barring under Limitation Act

A friends partner was repaying his student loan through his wages, but lost his job 5 and a half years ago. If he still hasnt found work when the 6 years are up, would the loan be statute barred.

[miliitant]

Re: Limitation Act

error

[miliitant]

Re: Limitation Act

the old style student loans will be subject to the limitations act

that is before july 1998 and were subject to the cca 1974

any loan taken after that date is a no go ime afraid

i had this run in with link financial

i believe the salary limit before deductions are taken is £21000 from wages

[Guest]

Re: Limitation Act

Stature bar has nothing to do with the CCA does it?

I cant see why it would not apply, it would need a statutory instrument to be passed to give them exemption in my opinion, perhaps that is where to check.

D

[Guest]

Re: Limitation Act

• This is from national debtline
  
  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.
  
  
  
  
  

D

[Guest]

Re: Limitation Act

HI

So it looks like the limitation act does apply. in both cases of the old loan(pre 98) and the resent ones.
The difference is that in the newer ones the company can collect the payments directly from your wages without a court order( so the SB is not an issue)

D

[miliitant]

Re: Limitation Act

Pre 1998 or not?

There are two main student loan systems.
1. Those students who commenced their course of study between September 1990 and August 1998
2. Those students who commenced their course of study from September 1998 onwards.

The first type of student loan (old scheme from here on) is based on a credit agreement and is regulated under the Consumer Credit Act 1974.

The second type of student loan (new sheme from here on) is not regulated under the Consumer Credit Act 1974.

So how to tell which you are?

a) Firstly when did you start your course?
If you started your study before the 31st August 1998 then you would have been on the old loan scheme.
Its not when you took the loan (I took mine out in June 1999 but am on the old scheme as I started before the 31 August 1998)

b) do you pay for your student loan through your pay packet?
The new scheme works as an attachment to your earnings - if your payed more than aprox £17,000pa
(i believe £21000 now as it has been a while) pre tax then you end up paying back your loan automatically through your wage packet.


you beat me to it in the previous post

like i said

i had three months of this with link financial

[CYNthesys]

Re: Limitation Act

Thanks for the info, will pass it onto my friend.

I'm 100% certain the loan was taken out in the 1980s

[miliitant]

Re: Limitation Act

then it will be statute barred

[Guest]

Re: Limitation Act

It seems that a bill passed that enables the repayments to be taken out using the PAYE system for agreements after 1998.
So whilst the agreements will indeed still be statute barred after this date, it will not stop the repayments being taken, as the amount is still owed(as we know sb debts still exist it is just not enforceable through the courts this side of the border).

This leads to the interesting question of what happens in Scotland, when a debt is barred under the Sottish laws it is also extinguished. So their would be no debt to collect.

D

[CYNthesys]

Re: Limitation Act

Sorry guys, my mistake

He was a mature student and didnt take the loan out until after 1998

[Guest]

Re: Limitation Act

Then it would be statute barred, but if he was in employment earning over the minimum, and paying tax, the repayments would be taken from his earnings.
However if he did not meet these criteria they could not enforce through the court.

D