Don’t Pay It!

by B. Braddock

The government’s new education policy will load the next generation of students with massive debts — up to £9000 in fees per year, on top of loans to pay living expenses. The real politics behind this policy: keep higher education a privilege of the elite; and for those who manage to climb their way up the ladder, keep them saddled into obedience with a lifetime of debt.

But there is a way out! Just say No. Don’t Pay It. In 1991 millions came together to bring down the poll tax — and Margaret Thatcher — under the slogan “Can’t Pay! Won’t Pay!” Simply: they refused to pay up; and formed non-payment unions to support each other against the bailiffs, and stop individuals being picked out and criminalised.

More recently, we’ve seen mass non-payment actions of other kinds. In the financial crisis of 2008 the banks simply refused to pay their debts — their friends in government stepped in and bailed them out. When the same banks try to squeeze money out of students to keep their bonuses rolling in, why shouldn’t students follow their example?

It’s fear that keeps us debt slaves. So what what actually happens if you just say no? In fact: not much at all. Here’s my own story as a student non-payer. I built up around £30,000 of debt as a student in the late nineties. I never paid back a penny. They never put me in prison. They never really interfered with my life in any way. Unlike many friends, I never had to work in a shitty job just to pay off my debts — being voluntarily debt free has left me able to make my own choices, to live the life I want, travel, study, work, live on my terms not as a slave of the banks. I recommend it to everyone.

Is it that simple? To be more detailed, being voluntarily debt free is not nearly as scary as most people think — as they want you to think — but it does involve making some choices. Basically, in the UK today (unlike Dickens’ day) non-payment of debt is not a criminal matter. You cannot be locked up for non-payment, the police will not come after you, and it should not effect your job prospects. The consequence you do face is that the banks will give you a bad credit rating. You will find it harder (though not impossible, if you really want) to get into more debt, including mortgages, car loans, or credit cards.

Seriously? You really don’t have to pay? Some more detail. As well as student loans, I had a career development loan, and also normal bank overdrafts and credit card bills I worked up supporting myself as a postgraduate student. In the first few years after I defaulted on my debt, I received lots of intimidating letters. At first there were letters and phone calls from the student loan company and the banks. Later the letters came from specialist debt collecting agencies — the banks had sold my debt on to these companies, who specialise in buying bad debts and trying to collect at least some of the money back. Some of the letters offered to make me deals: I only had to pay back half, or less, of the money. The longer it went on the less they asked for. Others warned me that if I didn’t pay back my debts I could be taken to court, or bailiffs could be sent to my home. In fact I never saw a bailiff. If they did take me to court, I never received a summons. All I saw were lots of letters. After a while there were fewer letters. After a few years the letters stopped. That was it.

Deciding not to pay did cause me some minor inconveniences. My credit rating (a score you’re given by companies called credit reference agencies which the banks use to see if you are a good customer to lend to) was as black as possible. No bank would give me a credit card or overdraft again. I was able to open a basic current account with a cash card, but for years I didn’t have a debit card. Like any “normal” person, I got wages paid into my bank account, tax and direct debits paid out. However I had to pay for everything with cash, and if I needed e.g. to buy a ticket on the internet I would ask a friend to use their card.

Strangely enough though (or perhaps not so strange, now we know all about the sub-prime crisis), it wouldn’t have been a big problem for me to get a mortgage if I’d wanted. A friend once introduced me to a mortgage agent who explained he could easily arrange a “self-certified” mortgage even with no credit rating and no proof of income. It’s true though that the interest rates on such “sub-prime” mortgages are higher than for good payers.

To my mind, the hassles I had as a non-payer were minor inconveniences compared to what I won. Most obviously, I saved £30,000. More importantly, I took hold of my freedom. When I see other friends stressed out and worn out working in shit admin jobs to try and get the mountain of debt off their backs, I know I made the right choice.

A few questions:

Why is it so easy?
The main threat creditors have against you is court action. But, as in my experience, although they make lots of threats, they often don’t go through with it. They are calculating: are the chances of getting the money back off you worth spending more money in legal costs, bailiffs, etc? It is very cheap for them to send out scary letters (written by computer using standard formulas), and many people will give way easily under this “pressure”. It costs a lot more for them to actually follow through, and it makes financial sense for them to give up if they see you are not intimidated.

But what if it does go to court?
It’s important to be clear that this is a civil court, not a criminal matter. The court cannot send you to prison. You have broken no law. The worst that can happen is what is called a “County Court Judgement” (CCJ) against you, which again simply looks bad on your credit rating. The court can order you to pay money out of your “surplus income”, and can allow the creditor to send bailiffs to come to your home to take possessions if you still don’t pay. Bailiffs are NOT allowed to break into your home. You DON’T have to let them in. If you do let them in, they are NOT allowed to take your basic furniture or clothes, education or work tools (e.g. books, computers).

Remember: Don’t be afraid! Banks are bullies, their profits are based on fear and intimidation, on picking on the weak. Stand up to them and they’ll often back down — it’s just not worth their while. Overcome your fear and you too can live free of debt slavery!

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NOTE from the Sintians:

many thanks to B Braddock for sending this to us. Are her/his experiences unusual or shared by other former student non-payers? Please add your stories and debt tips at  http://sintiki.wordpress.com/2011/01/28/student-debt-the-solution-is-non-payment/