UK Citizen Working in Bangkok, but not Paying Back His Stdfent Loan

[warriorbangkok]

Hello everyone,

I have a friend from the UK who took out a Student Loan to pay for his degree. When he came to work in Thailand he carried on paying it for a few years, but then disaster struck!

His UK bank account (HSBC) started a complicates PINSentry security system and it didn't work over here. He couldn't check his balance properly, and soon went overdrawn.

He cancelled his Student Loan repayments because of this. Now, he has a good life in Thailand and has too many bills to pay to afford restarting his student loan payments.

His passport is due to expire soon, and he has two questions:

1. Will his bad student loan status affect him getting his passport renewed?

2. Are there any repercussions in the long term that he could face by not paying back his student loan?

[mmh8]

no, the passport will still be renewed

the only repurcussions will be on return to uk

the passport office are only interested intheir money, the student loan company is its own business, it may have sold the loan onto a less reputable place

[FalangBaa]

Your "friend" should change his username to "worrierbangkok" immediately, because he has plenty to worry about. No, in all honesty, you'll be fine. Why would you not be able to get a new passport just because you have bad debts in the UK with a private-sector bank? Last time I heard, HSBC wasn't running the operation to print UK passports.

[mmh8]

the op is not worred about hsbc it is the student loan company

[celso]

I haven't paid any student loan in six years of working overseas. Both in Europe and in Thailand. The company is toothless, and cant even do anything to your credit report. Don't worry about it.

[cassde]

I question your friend's use of the HSBC security facility. I have an HSBC account and security facility which works fine in Thailand. I suspect he just stopped paying his Student Loan and is using the HSBC facility as an excuse!

[roamer]

I haven't paid any student loan in six years of working overseas. Both in Europe and in Thailand. The company is toothless, and cant even do anything to your credit report. Don't worry about it.

Not "toothless", just like a dog that hasn't bitten yet. However bite they will,no choice really. Just last week they have come under severe criticism by the Public Accounts Committee on exactly this problem.

"

The committee also believes the approach to collecting repayments "is not tough enough".

"The Student Loans Company has not put enough energy into identifying those borrowers who should be making repayments but have slipped out of contact," Ms Hodge said.

"It knows very little about British graduates who live abroad or about graduates from the EU who have since left the country. Will they ever pay back their loans? The Student Loans Company simply doesn't know."

However the department acknowledges there is "room for improvement".

"We need to ensure that all borrowers who are earning over the relevant repayment threshold are repaying their loans including those who have moved overseas after leaving their course," the spokesperson said.

"We are continually improving the collection process for borrowers and we will carefully consider the PAC's recommendations as part of this programme."

http://www.bbc.co.uk/news/education-26171742

Also what happens when you move abroad is that the rate at which you are assessed changes and it's quite possible you would still legally fall below the repayment level if working in Thailand dependent on salary..

" There’s a common misconception among borrowers that quitting Britain will put an end to loan repayments but buried in the terms and conditions of the loan agreement are overseas repayment schedules. In some cases living abroad can even increase what you pay.

In the UK, borrowers only make repayments if their income is above £21,000. The same theory applies overseas, although the thresholds vary from country to country. For example, in France the lower income threshold is £25,200, while in India it’s just £8,400.

If borrowers fail to declare their income the SLC could allocate a default repayment, which in most cases is far higher than the salary percentage. In France the default is a staggering £241 a month."

http://www.telegraph.co.uk/finance/personalfinance/expat-money/9287346/Student-loan-could-land-you-in-court-if-you-move-overseas.html

The past isn't a guide to the future, the political pressure is ramping up on this one. It's inevitable that County Court judgements for missing debtors will be used and that will affect your credit record.(Although not of course your passport)

Also note that this debt is not statute barred, it doesn't go away.

If you're never going to return to the UK to live or work then you can ignore it. Otherwise it makes a lot more sense to do the overseas assessment.

Ps. For Thailand the threshold is £9,825 (about 531K THB) per annum. So you then repay 9% of your income above that figure.

Edited February 22, 2014 by roamer

[CarlBkk]

Just like any bank or credit card debt, they will sell it on to a specialist company who will try to trace his address and contact details. If they get no joy, it will be sold on again then again. The most important thing to realise is that if they cannot find a record of his current address, debt collection procedures cannot begin. So, if Experian or his banks do not have it, they also cannot get it. If he comes back to UK and lives in a new address without linking this to his previous address, he will also remain anonymous to them.

Lastly, if they cannot make contact for 6 years after the debt became valid, it must be wiped by law.

[roamer]

"Lastly, if they cannot make contact for 6 years after the debt became valid, it must be wiped by law."

Wrong.The Limitation Act 1980 does not apply to any student loans after 1998. Student loans since 1998 are income contingent and never expire. And they don't need to trace you either as the loan is linked to your NI number so whenever you work in the UK the debt finds you.

" And the DWP (Department of Work & Pensions) doesn't have to go to court to take money off any benefit payments they're making to you, even if the debt you owe them is over six years old.

Student Loans taken out since September 1998 are similar: repayments can be taken straight out of your wages, no matter how old the debt is.

And VAT and Income Tax debts simply never become unenforceable."

http://www.debtadvisorycentre.co.uk/advice/what-does-statute-barred-debt-mean-0-3991-0.html

Edited February 23, 2014 by roamer

[edwardandtubs]

The limitation period doesn't apply to student loans taken out before 1998 either. The loan stays with you for life and every time they send you a reminder letter you're charged for it.

Edited February 23, 2014 by edwardandtubs

[roamer]

The limitation period doesn't apply to student loans taken out before 1998 either. The loan stays with you for life and every time they send you a reminder letter you're charged for it.

The difference is that pre-1998 loans come under the Consumer Credit Act, this restricts enforcement action like CCJ's after the time period provided certain criteria are met. It does not cease to be a debt however and you can still be pursued for it. Anyone in this situation can follow a course of action called a "statute barred" approach that whoever holds the debt is required to respond to. This effectively closes the debt.

For anyone in this situation there is help here.

http://forums.moneysavingexpert.com/showthread.php?t=3426771

[mmh8]

for a bank chasing after 10 to 20 k must cost more than its worth.

To chase someone in Thailand, is it really worth it for the student loans comapny or transam or whatever they are called. once they've tracked you down on your beach in between diving lessons on samui?, what can they do? break your legs? do they have any tools they can use to get it back? I'm not sure, but the cost of travel to thailand is going to be a significant bit out of that, then the man hours spent, the actual hours value, if I was paid what my company charge for my time I would only have to work a few weeks a year to earn my salary. this studnet loan company with its expensive uk base, ok in scotland, and all these companies it uses, surely it can't be worht it;.l

[wolf5370]

for a bank chasing after 10 to 20 k must cost more than its worth.

To chase someone in Thailand, is it really worth it for the student loans comapny or transam or whatever they are called. once they've tracked you down on your beach in between diving lessons on samui?, what can they do? break your legs? do they have any tools they can use to get it back? I'm not sure, but the cost of travel to thailand is going to be a significant bit out of that, then the man hours spent, the actual hours value, if I was paid what my company charge for my time I would only have to work a few weeks a year to earn my salary. this studnet loan company with its expensive uk base, ok in scotland, and all these companies it uses, surely it can't be worht it;.l

Student Loans debt is like tax debt, state owed. There are people employed in those expensive offices to chase, to prosecute and to investigate (fraud and non-payment) and are paid regardless of their work load - so they will chase. Cost of collection is only one part of it, they also need to show the public that they are doing their job. Often the cost of brining benefit cheats to justice far out weighs the benefit of doing so in purely financial terms - they rarely get it back and orders of repayment are spread out over long terms and can be pushed as low as five quid a month (which means in real terms it will never be paid back as inflation would eat it away faster than the return).

With growing political pressure on the government to clamp down on tax cheats, don't be surprised if students living abroad are not targeted - it would be fairly simple to enforce that they submit tax records for overseas work, simply by threatening to cancel passports and chasing home bound assets and placing leans on UK based income/savings/etc. It may even be possible to refuse degree accreditation requests and transcript requests for state owned/subsidised universities - that would hamper new job applications and interim qualification checks (which happen from time to time for certain state workers in some countries - especially teachers are medics). None of this is fact yet - and to some extent is fear mongering - but it is not as expensive a concept as one thinks, after all, it is the degree that matters and having the ability to be abroad - both in the direct home control of the Government.

[mmh8]

hmm the student loan company is something of a contractor though I beleive. additionally if the scots do indeed acheive some sort of independence what then. also student loan isnot the same as benefit cheat. those that installed the idea of loans would be those that would have received grants when they was of the age of studenting.

student loan is not the same as tax cheat. for one tax is more philosophical in nature. whereas the student loan was taken with a view to improve oneself, invest in oneself. a choice in fact. tax is no choice.

benefit cheats, well it was an excuse for those that find that for a small reduction in income they avoid spending time on the treadmill and have more time to do other things. linked to tax in that it becomes a viable finanical alternative to stop working and paying increasing taxes and to start collecting taxes themselves.

I support the warriuor s friend in this story in that were they to go to uni a decade before they would have received grants, tax payer money to get educated

[millwall_fan]

Ps. For Thailand the threshold is £9,825 (about 531K THB) per annum. So you then repay 9% of your income above that figure.

This being Thailand, I wouldn't have thought it would be that difficult to get your employer to state that your income is less than 531K a year.......

[Thainess]

Ps. For Thailand the threshold is £9,825 (about 531K THB) per annum. So you then repay 9% of your income above that figure.

This being Thailand, I wouldn't have thought it would be that difficult to get your employer to state that your income is less than 531K a year.......

You'd be surprised! I have it on reliable authority that almost 20% of English teachers in Thailand are now earning more than that! The other night, I even saw one of their kind drinking TWO BOTTLES of Siam Sato outside 7-Eleven in the SAME evening. Living it large...

[Bmouthboyo]

Just a side note that the threshold for repayments on UK SLC loans in Thailand has gone from 9% over £10150 to 9% over £6940!!

So if you earn over 28114 TBH a month you are required to pay 9% opposed to the old 41117TBH threshold.

God knows how they have come to this when prices are going up in Thailand.

Edited March 19, 2015 by Bmouthboyo

[teatree]

When I took out a student loan the agreement was that when I reach 50 years of age (or so) any requirement to pay the outstanding amount is waived.

Also, I understand that any overdue amount owed to credit card companies after 8 years and is just written off as bad debt.

It will affect credit ratings however.

Edited March 19, 2015 by teatree

[teatree]

Your "friend" should change his username to "worrierbangkok" immediately, because he has plenty to worry about. No, in all honesty, you'll be fine. Why would you not be able to get a new passport just because you have bad debts in the UK with a private-sector bank? Last time I heard, HSBC wasn't running the operation to print UK passports.

Why do people always suspect that if someone is asking a question on this forum on behalf of a friend, that automatically means that the person asking the question is concerned party.

This is an anonymous forum! Do people really care about sullying their good (user)name that much?

[realfunster]

If your friend is earning above the required threshold why not pay it ? Doing otherwise is dishonest, at best.

I paid mine back when arriving in Thailand 10 years ago at 70+Baht to the pound, at least the exchange rate is a lot more favourable these days!

[bangkokowl]

Just a side note that the threshold for repayments on UK SLC loans in Thailand has gone from 9% over £10150 to 9% over £6940!!

So if you earn over 28114 TBH a month you are required to pay 9% opposed to the old 41117TBH threshold.

God knows how they have come to this when prices are going up in Thailand.

Have you got a source for this?