09 Mar 2015

A question about : Letter about repayment of loan

About 5 years ago my wife and I returned from Spain having spent 3 years there in my wife's apartment that used to belong to my wife's mother. We had no money and no job and had to stay in a friends spare room until we could rent somewhere. We applied for job seekers allowance but they told both of us that as we had a second home in Spain we weren't entitled to anything, even though both of us worked before we went to Spain and I worked and paid tax etc in Spain. They eventually gave me an emergency loan and told me they would take payment from my benefits! I had forgotten about this but have now received a letter saying they have put this in the hands of the DWP debt collecting agency and i will hear from them about repayment. Can they do this?

Best answers:

  • It was a loan therefore it needs paying back, they will deduct it from current benefits if you are claiming or those that are not, are now finding the dwp and hmrc are going after payment through attachment of their income.
  • The clue was in the word "loan".
  • Yes, debts can be pursued - ultimately - in the County Courts for upto 6 years, although of late, I've heard of people receiving letters from the DWP re some historic debts too. I assume all who received emergency loans received letters.
  • I had an emergency DWP loan nearly 9 years ago, by the time by benefits were sorted out I had a new job. I assumed they had taken the loan out of my backdated benefits and thought no more of it.
    I got a letter in December 2014 regarding this saying that they would use a debt collection agency if I didn't respond within 31 days, what with Christmas and one thing or another the letter went to the back of the to do pile, I then received a letter in January saying that I they had sent a letter to my employer for the money to be reclaimed through my wages.
    So in short yes they can claim the money back the loan I had was around Ј200, I think chasing something that is 9 years old is a bit of a push but if it is owed it is owed.
    I don't know why it has taken them so long, I have had the same address for the past 7 years, I claim tax credits and housing benefit and I am on the electoral roll so I am not difficult to find!
  • @missymish
    Good heavens, yours is the first time I've seen a post from someone about an old debt surfacing and everything said sounds reasonable and believable.
  • I've seen a few threads like this recently regarding emergency loans etc being reclaimed after umpteen years.
    I think if it happened to me I'd just be thanking my lucky stars about the fact the repayment doesn't include interest, admin charges, penalties etc.
    Unless it does?
    Perhaps it should?
  • I had to pay back an emergency loan paid to my ex when he was single.., but because he'd since moved in with me, and at the time was receiving Jobseekers allowance of Ј40 a week through my income support - the money from the loan came out of my income support. I hope that makes sense. To say I was paying for the 'privilege' of having him living with me was putting it mildly lol.
    This also was a crisis loan taken out some years before.
    Nothing I could do.., I had him living with me (not for much longer at that stage).
  • There is of course no moral problem with loans being repaid - the problem arises as fraud was much easier in the distant past - and some very old indeed loans are being required to be repaid where it is utterly impossible to prove that you did not in fact take out the loan.
    Once upon a time, it was possible to get a loan in person with little more than turning up at the jobcentre and giving the appropriate story.
    Needless to say, identity theft was high, as no photo-id was required.
    After a short while the DWP will (in principle) have written to the person in questions last known address, and after 13 months it will have been too late to challenge the decision on the overpayment.
    If they'd moved, and weren't there to say 'no, I diddn't' - and appeal it at the time, they're now stuck.
  • Hmm. I assume these debts cannot be statute barred?
    What a bunch of crooks the government are, pursuing hard up people for miniscule amounts and letting multimillionaires off who commit tax evasion or avoidance on an industrial scale.