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Dealing with debt

Here are some commonly asked questions that students ask us about dealing with debt.

I've used all of my Student Loan and need an overdraft from my bank. Will I get one?

Approach your bank, who can usually offer an interest free overdraft on a Student Account in a very short period of time. If you wish to increase the limit, you will also need to contact the bank. However, if you have had previous problems in handling your account, the bank can refuse an overdraft or extension.

What happens if I have reached my overdraft limit and have no money?

If you draw money from your account without permission, most banks impose high charges for doing so. These charges often increase on a daily basis - which can soon spiral out of control and make it very difficult for you to get back under your overdraft limit. Try discussing this with your bank, informing them of your current situation if you think that payments will come out of your account that will take you over your overdraft limit.

Your financial difficulties may have been caused by exceptional circumstances, such as unforeseen costs, or perhaps you have struggled to budget your Student Finance income over the term. Contact us to ensure that you are receiving all of the funds to which you are entitled. We will also be able to offer you some guidance on managing your money as well as discussing other potential options, such as the university's hardship fund - called the Student Support Fund.


What action could a bank take if I exceed my agreed overdraft?

If you take no action at all, bank charges will begin to build up, often increasing on a daily basis. These charges can very quickly spiral out of control and make it very difficult and expensive to bring the account back under your agreed limit.

If you leave your account in unauthorised overdraft for too long, the account can be frozen by the bank and transferred to the bank's debt recovery team, who will contact you to organise repayment. Ultimately, if you make no arrangement or do not keep to the terms of an agreed arrangement, County Court action may be taken to recover your debt, which would affect your future credit rating.

It's best to contact your bank as soon as possible to discuss your current financial difficulties and what options you have to avoid any further action being taken.

What happens if I have debts to the University of Sunderland for tuition fees, accommodation or library fines?

Debts of this nature are serious because they can affect your continuation on the course, and/or your ability to graduate and receive your qualification.

Generally, students will not be allowed to continue into a following year, or graduate if in their final year, if they have debts to the University from a previous year. You should contact the University's Credit Control Team explaining your current financial difficulties and providing your repayment proposal.

For help with producing a repayment proposal, contact us for guidance.

I'm thinking about leaving my course as the financial pressure is getting too much. Will I have to repay my Student Loans?

We'd always recommended to discuss this matter confidentially with Student Financial Guidance team, as we may be able to help you find a solution to stay on your course - whether that be by giving guidance on how to manage your money, helping you secure funding that you might be entitled to, or assisting you in applying to the university's Student Support Fund, for example.

If there are other factors involved, please also consider talking to the Student Union, or the University's Student Progression team in your Faculty, as they too may be able to find ways to help.

In terms of the Student Loans, the repayment model is the same regardless of whether you withdraw or graduate from the course. Repayments would not start until the April after you left the course, and only if your annual income is over the student loan income threshold (£27,295 for most recent undergraduate loans). For further information on this see student loans explained and Student Loan Repayment

What can I do about gas, electricity and phone bills that cannot be paid?

You may be able to negotiate with the company concerned, to spread the payments and arrange to pay by instalments. Alternatively, a pre-paid meter for gas or electricity can be installed in your property to collect any arrears, as well as paying for your ongoing usage. As a last resort, your energy supplier can take action to disconnect your supply for non-payment of bills.  For further information, contact your energy supplier.

If your supplier has sent you a letter threatening disconnection of energy supply, get in touch with us in Student Financial Guidance to see what options you may have to deal with this matter.

Should I be paying Council Tax? I have told the Council that I am a full-time student.

If you live in a property alone, or with other full-time students only, that property is exempt from Council Tax. You can get a Council Tax letter from your University E-vision account.  Ask our Gateway team if you need further support with obtaining this letter. Once you give your Council Tax department this letter, they should amend your Council Tax bill.

However, if you live with non-students, or part-time students, full exemption may not be available - but you may still get a reduction if there is only one non-student adult living in the property. Only students on full-time courses are given special exemption rights in the Council Tax regulations, not part-time.

Finally, if you are repeating a year of your full-time course then you should still be classed as being a full-time student for Council Tax purposes, even if you are only repeating some of the modules.

If you are having any issues with Council Tax, let us know at Student Financial Guidance

The interest on my credit/store cards keeps rising and I am having difficulty in paying.

You can contact the credit companies who issue the cards to alert them to your problem.

In order to reduce your payments, they will generally expect to receive a Financial Statement of your income and expenditure, and details of all your creditors. They will also expect an offer of payment by instalments, even though it may be lower than the minimum payment currently expected on the account. At this stage, a freezing of interest can be requested but the success of this depends on the policy of the individual company.

There are a number of debt advice agencies who will be able to help you with this - such as Citizens Advice, National DebtlineStepChange, Christians Against Poverty or Payplan.

Alternatively, if you feel that your current card's interest is unaffordable but you would still be able to manage monthly payments on a better card, you could consider transferring your balance to a card/account with cheaper or zero interest. MoneySavingExpert has guides on how to do this and what the current offers are.

My creditors are mentioning the use of bailiffs to try to seize my property for Store Card debts. Can they do this?

You may wish to first check the following information about bailiffs

If you have debt problems, and/or you are receiving letters from debt collection agencies threatening court and/or bailiff action, you should seek specialist debt advice. There are a number of free debt advice agencies you can speak to - such as Citizens Advice, National Debt Line , StepChange, Christians Against Poverty or Payplan.

My Store Card account has been passed to a Debt Collection Agency. What powers does it have?

If a creditor is unable to get you to respond to demands for payment, the account may be referred to a debt collection agency.

If you have debt problems, and/or you are receiving letters from debt collection agencies, you should seek specialist debt advice. There are a number of free debt advice agencies you can speak to - such as Citizens Advice, National DebtlineStepChange, Christians Against Poverty or Payplan.

Can debts ever be written off?

Creditors will not agree easily to 'write off' a debt - particularly if that debt has been incurred recently. Negotiating a partial write-off is sometimes possible, if the creditor agrees to accept a smaller sum to settle and close the account with no further action to be taken for the remaining balance. This is only usually accepted by a creditor if they see no other option to recover the debt over a period of time.

If you have debt problems, and/or you are receiving letters from debt collection agencies, you should seek specialist debt advice. There are a number of free debt advice agencies you can speak to - such as Citizens AdviceNational DebtlineStepChangeChristians Against Poverty or Payplan

If I have borrowed from friends, can they do anything to make me repay?

Have a look at the following information here which should clarify what action they may consider in order to get their money back from you.

What happens if I am issued with a summons for debt?

This generally will have been sent by the County Court. You will need to make sure that you understand it, complete and return it.

If you admit the debt, you need to complete an Income & Expenditure Form showing what spare income, if any, you have and provide an offer of repayment in a lump sum or by instalments. This information is then passed to your creditor, who will accept or reject the offer, and the judgement will be entered accordingly.

For further information see:

Creditor takes you to court for debt

HM courts & tribunal service





What is meant by 'black-listing' and 'credit scoring'?

The term 'black-listing' is sometimes used in conversation to describe being in a position where previous debts are preventing someone from obtaining new credit - but it's an inaccurate way to describe what's known as 'credit-scoring'. A poor credit score can affect your ability to access credit or financial services.

For more detailed information regarding credit scoring, what information is kept by credit reference agencies, what to do if you are refused credit and much more, please see here



Can I get my credit reference file amended?

If you think any of the information held on your credit reference file is wrong, you can write to the credit reference agencies and ask for it to be changed. But you can't ask for something to be changed just because you don't want lenders to see it.

You can also add extra information about your situation. For example, you can add information if you have had a past debt but have now paid it off. This is called a notice of correction. This might help you if you apply for credit in the future.

For further information see how lenders decide whether to give you credit



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