Debt Relief Order - advice needed 're bank

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  • Drohelpneeded
    Drohelpneeded Posts: 9 Forumite
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    Some bad news today :(

    We owed some council tax to an old property as they kept changing the reduction entitlement so we were 2 months behind when we left. Wouldn't tell us what we owed until I chased them for 4 months. Then got a judgement letter asking for income. Filled it out and when asked proposed repayment, offered £1 per month as per step change suggestion as they said we couldn't offer more as it may affect us being accepted for dro. Still haven't heard back from them about this.

    Husband is due to be paid on Tuesday and got his payslip today. Council tax of £120 has been taken out.

    I feel sick and I've no idea how we're going to get through the month now. If only it hadn't taken so long to save for the dro fee then the dro would have been in place before this happened :(
  • fatbelly
    fatbelly Posts: 20,499 Forumite
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    The advice to offer £1 was wrong in my opinion. However, if the council got an attachment to earnings then there's nothing you can do to stop them actioning that. But it must stop if you get a DRO.

    Deductions are done on a proportional basis:

    Net monthly earnings Monthly deductions Deduction rate
    Not exceeding £300 Nil 0%
    Exceeding £300 but not exceeding £550 £9.00 to £16.50 3%
    Exceeding £550 but not exceeding £740 £27.50 to £37.00 5%
    Exceeding £740 but not exceeding £900 £51.80 to £63.00 7%
    Exceeding £900 but not exceeding £1,420 £108.00 to £170.40 12%

    It looks like you're in the 12% band (for this month anyway). Any chance of stepchange getting the application in within the next couple of weeks?
  • hamsterfan1
    hamsterfan1 Posts: 8,280 Forumite
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    w have a DRO and bank with NatWest and have a normal account , they may downgrade it if you go bankrupt though
    proud gran to 4 lovely boys and one little girl
  • fatbelly
    fatbelly Posts: 20,499 Forumite
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    hamsterfan1 wrote: »
    w have a DRO and bank with NatWest and have a normal account , they may downgrade it if you go bankrupt though

    Do you have an overdraft facility?
  • Drohelpneeded
    Drohelpneeded Posts: 9 Forumite
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    Husband phoned step change yesterday and they were very surprised by what the council had done, especially as they didn't even send a letter. I emailed the council about it, and they said the £1 offer wasn't acceptable, therefore they are able to go straight for an attachment of earnings order but I don't understand how they can do that without telling us £1 isn't acceptable!

    Step change had advised £1 as any more may be seen as us "favouring a creditor" and the dro may have been refused had this been the case.

    Husband told step change yesterday to go ahead and submit the dro application. His payday isn't actually until Tuesday when he'll be minus £120, and then hopefully by the next payday the dro will be in place so the attachment of earnings order can stop. I just don't know how we'll get through this month without that money.

    I don't understand how step change can say we have less than £50 a month spare and therefore eligible to apply for a dro, yet the council can go and take more than double that. It's such a horrible situation and I've been literally worried sick over it. Hopefully the end is in sight and we'll be working very hard to never end up in a mess like this again.
  • fatbelly
    fatbelly Posts: 20,499 Forumite
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    The council do not have to check what effect an aoe will have. If they have a liability order than can just get one, and the deductions are on the sliding scale. There's no flexibility.
  • Drohelpneeded
    Drohelpneeded Posts: 9 Forumite
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    I'd have thought the council would at least need to write to us to inform us our offer wasn't acceptable though?

    Good news though - I've checked the insolvency register this morning and my husband is showing on there (Well I say good news, It's quite upsetting to see too). I've informed the council as step change said it can take up to 4 weeks for them to tell them, so they said for us to let them know asap.

    Does it matter than this went through on 21st, but the council haven't actually taken the money via AOE until 25th? Or am I clutching at straws?

    Still waiting on new bank account details to come through but hopefully that side of things will be ok.

    I've already put everything we don't need on eBay to pay for husband's dro, but desperately trying to find more things to make my £90 fee to get mike done too. Feels impossible as we are already £120 down this month now but I know the sooner I can get it sorted the better.
  • sourcrates
    sourcrates Posts: 28,883 Ambassador
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    If the DRO is live, and the council have not yet taken the £120, they may not be able to do so, as any form of insolvency cancels out all forms of enforcement action.

    Dont know if CIS is around, maybe he could clarify.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Drohelpneeded
    Drohelpneeded Posts: 9 Forumite
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    It's showing on his pay slip as a deduction so it's been processed before the dro was live, but as his payday isn't actually until the 25th I'm not sure where that leaves us. Step change said they didn't know as they've never heard of this happening?! But seems an aoe order is common so that seems odd!
  • CIS
    CIS Posts: 12,260 Forumite
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    Drohelpneeded wrote: »
    I'd have thought the council would at least need to write to us to inform us our offer wasn't acceptable though?

    Good news though - I've checked the insolvency register this morning and my husband is showing on there (Well I say good news, It's quite upsetting to see too). I've informed the council as step change said it can take up to 4 weeks for them to tell them, so they said for us to let them know asap.

    Does it matter than this went through on 21st, but the council haven't actually taken the money via AOE until 25th? Or am I clutching at straws?

    Still waiting on new bank account details to come through but hopefully that side of things will be ok.

    I've already put everything we don't need on eBay to pay for husband's dro, but desperately trying to find more things to make my £90 fee to get mike done too. Feels impossible as we are already £120 down this month now but I know the sooner I can get it sorted the better.

    The AOE figure would be calculated and paid by the employer, once the employer is instructed to collect X amount then the council don't generally get involved unless there are problems.

    The cross-over with the insolvency is an unusual case, I've not seen that happen before (I worked in council tax recovery for a decade). In theory, if everything was done by the day then the moment the DRO went through them any debts to the council from your husband's point of view would be null and void and therefore the monies, on that basis, would not be taken from by AOE. In practical terms the way things take time to go through it takes time.

    I would speak with the practitioner dealing with the DRO about it and see what they say - they may not wish to purse to the issue or they may instruct the council to return the monies to be dealt with. I suspect the outcome would depend on how they wanted to deal with it.

    Bear in mind though that council will continue to proceed against you in the meantime.

    Craig
    I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.
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