Sunshine or Greycloud on the horizon?

A question about : Sunshine or Greycloud on the horizon?

I have about Ј25k of debt which are all under a temporary arrangement plan, MBNA has sold the debt on but the others remain with the original financial institutions. I don't know what amount would be accepted as full and final settlement.

My dilemma is this: My boss is interested in helping me out as I've had to turn down a partnership opportunity due to my credit rating (I came clean). They'd like to give me an interest free loan, so that my credit has some years to recover while I'm paying it off through my employment. Very nice and thoughtful, but I can't help thinking I will be a prisoner of my own job. I'm not looking at changing jobs or anything as I am very happy where I am, but rather than the door being closed, I feel like it will be locked.

What would you do? Accept or decline?

SS

Best answers:

• I'm sure far more knowledgeable people will be along to advise but in the meantime, my initial thoughts!
  Sounds like a nice idea in theory but I think you are right to be wary- very wary! Is the loan to be from the company or your boss personally? In your shoes I think I would be seeking some specific legal advice if I was considering going ahead with it.
  Concerns I'd have include:
  1. What would happen if you lost your job, or suffered and illness or accident that prevented you from working?
  2. If they are taking repayments directly from your salary who is to determine how much, and would they be liable to change the agreement at their discretion, to recoup the money faster than you can repay?
  3. Would you feel completely at their mercy while repaying the amount? Would you feel as though the finger might be pointed every time you spend money on a meal out or some new shoes etc?
  4. What would be the consequences if you took out further credit while repaying them?
  5. If your credit file is already trashed then it will take a long time before markers drop off regardless, are they aware of this??
  So so much to think about here.
  (Edited as I didn't read properly!)
• Another thing... have you addressed the issues that caused you to find yourself in Ј25k of debt in the first place? Would you cut up/cancel all existing lines of credit and manage without them? I think this is important as all the pitfalls of consolidation loans apply here, but with potentially more serious consequences given your employment is involved.
• Sounds like you are doing great!
  It's a tricky decision, have you decided what you are going to do?
• Do you work for an "old fashioned family run firm" or something like that ?
  I find it difficult to believe a large company would do this for its employees, lets face it, what they do for one, they must do for all.
  You would need to get some kind of agreement in place, I would not trust a simple
  "don't worry, I`ll take care of it" approach, it may lead to all sorts of problems in the future.
  If you can make a suitable agreement, that your all happy with, and you don't intend moving jobs anytime soon, than I would say yes, do it.
  But you must refrain from using credit again whilst this is in place, close the card accounts when they are repaid.
  You don't want to find yourself in this position again do you.
• There would be legal and tax implications here as well. Theoretically, an payment from your employer is taxable as HMRC are not to know the reason for it. They could suddenly have decided to pay you extra and be trying to get around paying income tax.
  Legally speaking, you would essentially be indenturing yourself as if you were to leave, they could theoretically demand payment in full. What was once a cordial relationship could sour very quickly and leave you in all sorts of legal trouble. At the very least I would want some sort of legal document/contract in place which protects the interests of you both. It is all very well saying that this is a 0% loan, but what if down the line they change their mind and start charging whatever interest they like? Likewise, your circumstances could change and then what happens? What happens if you become too ill to work. How will this loan work under those circumstances?
  Just some thoughts
• Hi
  For what my opinion is worth, I recently took a loan through work. My scenario was very different (in financial difficultly, trying to avoid a DMP so spoke to HR who offered an interest free loan to cover some of my debt).
  My manager and HR department have been very good and supportive (far better than I expected), but it truely feel like the dynamic has suddenly changed, even if nothing physically has.
  I'm quite a private person, so don't like the fact that my personal life has now spilled into my work life, and I feel that the 'debt stigma' will always be there (even if its not). Maybe a level of paranioa has set in on my behalf. I am also officially on their 'debt register'.
  The situations are different (your employer knows, whether or not you accept), and you and I may be very different, but I would say think hard about whether you want those two parts of your life to be so interwined.