Overpayment of final salary

[mrs_overall]

A friend of mine retired on ill health grounds from a job with the local county council. To cut a long story short, she was overpaid by £1200 which she agreed to pay back at £20 a month.She has made every payment on time and the debt is now down to £500. Yesterday she received a letter from the county council which said-

"at this current level of repayment it will take in excess of 2 years to clear this debt which is unacceptable to the Authority."

They are now demanding that she pay the whole £500 within 4 weeks.
She cannot afford to do this as she is very ill and exists on benefits.
Can anyone tell me what her rights are please, as she is out of her head with worry.

[Count-A-Strong]

Was the agreement to pay them back verbal or written. As she's been paying them back for some considerable time there must be a 'principle' which they would find very hard to get out of. There may be someone who can give you specific legal reasons. I don't think she should worry.

[mrs_overall]

The agreement was verbal and was arranged with assistance from her union rep (who has since died, just to make matters worse!)

[Count-A-Strong]

Does she remember who the union rep dealt with at the council?

[mrs_overall]

No...it was just the wages/finance dept.

[Count-A-Strong]

As a first step I would write a very succinct letter stating something along the lines of 'In accordance with the verbal agreement arranged between my union representative and your finance department I wish to continue paying back the outstanding amount at the agreed rate'.

[mrs_overall]

Thanks Count.
I've already got half a strongly worded letter written for her

[Count-A-Strong]

No no no! Do not write a strongly worded letter. Just be factual. If it does go 'legal' ( which I doubt) she will need to demonstrate that she's been reasonable, not emotional.

[craft1948]

She doesn't need a written agreement............as she has been paying, and they more importantly, have been accepting the money, she has a deemed contract of repayment.

[mrs_overall]

Count - when I said strongly worded - I meant being emphatic about the facts - nothing emotional or threatening

Thanks Crafty

[Count-A-Strong]

Yes, that's what I meant by a 'principle' craft. You put it better tho!

[craft1948]

I used to overpay people :-(

[vivandorron]

It would appear that your friend has paid-back £700 over what must be a period of about three years , Consequently, as the Council has been happy with the arrangement of £20 per month, be it verbal or otherwise, I do not think that it is now in a strong position to alter it.

In fact, going back to my younger days when I worked in a Pay Office, it was acknowledged that overpayments were not legally recoverable.

It will be interesting to hear the opinions of other ABers who are professionals in legal matters.

Ron

[mrs_overall]

Ron - things ahave changed because overpayments HAVE to be repaid (I found a case law on the subject)

[ummmm]

I thought that was always the case Mrs-O..

[sumo19]

What the letter says is contrary to an agreement the two parties made. You do not have to comply with their demands.

.

[mrs_overall]

Thanks for that sumo

[Buenchico]

Sorry Eddie, I disagree. With very few exceptions, any creditor always has the right to demand full and immediate repayment from the debtor. (For example, many businesses get forced into bankruptcy when their banks withdraw their overdrafts without any notice whatsoever The bank always has the right to tear up any pre-existing agreements and to demand full and immediate repayment).

However, while the council has the legal right to demand immediate repayment they will be aware of the old maxim about 'getting blood out of a stone'. If your friend states that she can't pay the money back as quickly as the council would like (but stresses that she'll continue with the present payments) she can't be successfully prosecuted (under the Theft Act 1968) for wilfully failing to repay the money. So that means that the council can either accept her offer or seek civil action (through a County Court Judgement) against here.

A lot of people get worried about the prospect of having a CCJ against them, but they're often beneficial to debtors. That's because a court will only make an order requiring the debtor to make 'reasonable' payments, depending upon their disposable income. The County Court might well decide that £20 per month (or even less) is the maximum amount which is 'reasonable'. Once a CCJ has been issued (and as long as you friend complies with it)there will effectively be nothing further the council can do to hasten the collection of the debt.

Tell your friend to write to the council, detailing her income and regular expenditure. She should also make it clear that she acknowledges the debt but, because of her limited funds, she can only continue to pay £20 per month. The council might well accept the offer but if they write to her regarding possible court action your friend shouldn't worry. The court won't order her to pay back more than she can afford.

Chris

[thugulike]

If your friend was given ill-health retirement why didn't the council take the overpayment from her lump sum? She has nothing to fear from a court case, as Chris said, she can't be made to pay what she doesn't have.

[pink-kittens]

Why did she not pay it back immediately? Words fail me
I do not hold with guff she 'could not afford to'. The money wasn't hers to spend and I gather that is why she is having to pay it back at £20 a month now? Because she spent what wasn't hers to keep?