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    • Annie35
    • By Annie35 7th Sep 17, 12:40 PM
    • 117Posts
    • 78Thanks
    Annie35
    repossession - who pays the bills??
    • #1
    • 7th Sep 17, 12:40 PM
    repossession - who pays the bills?? 7th Sep 17 at 12:40 PM
    hi, so ive asked the bank & HA (Shared ownership) to repo my property but what do i do about the bills as ive moved out now, it's empty.

    Council tax have an excemption but only once the property has a repo order but im hearing that can take years for court, anyway i think my question is

    if i sign the deed of acknowledgement (is it?) will the bank take ownership from that point without having to go through court?


    currently i dont have any debt on it but will end up going bankrupt with the shortfall, I could really do with tying this up as neatly as possible now really.
Page 1
  • National Debtline
    • #2
    • 7th Sep 17, 12:58 PM
    • #2
    • 7th Sep 17, 12:58 PM
    Hi Annie35

    It’s very important NOT to sign the deed of acknowledgement if you intend to apply for bankruptcy. If you do the shortfall debt will not be written off in your bankruptcy.

    If you hand the keys back to the property (a voluntary repossession) you will be held liable for the mortgage and buildings insurance until the house is sold. That can take time and you will see your debts increase in the meantime. That may not be so much an issue if you intend to go bankrupt but it’s important you seek some specialist advice on this before going ahead. I’d recommend you get in touch with one of the free debt advice agencies for help.

    Susie
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • Annie35
    • By Annie35 7th Sep 17, 1:39 PM
    • 117 Posts
    • 78 Thanks
    Annie35
    • #3
    • 7th Sep 17, 1:39 PM
    • #3
    • 7th Sep 17, 1:39 PM
    see this DOA issue is so conflicting, some say it doesnt matter as its before bankruptcy, some say never ever. thing is i know council tax will have baliffs knocking before the months out, i guess im just going to have keep paying that for the time being.
    • debt doctor
    • By debt doctor 7th Sep 17, 2:00 PM
    • 4,171 Posts
    • 5,835 Thanks
    debt doctor
    • #4
    • 7th Sep 17, 2:00 PM
    • #4
    • 7th Sep 17, 2:00 PM
    Hi,
    you will never gain anything by signing a deed of acknowledgement so why bother? I agree that signing such a thing before BR would not further bind you to anything, as it would be just another pre bankruptcy contract.
    To my knowledge there has never been a successful DOA that has survived bankruptcy in any event - they remain untested.
    Any debts that you incur such as mortgage payments, insurances , etc will become BR debts.
    I understand the angle with the council tax as the procedure can bring bailiffs fairly quickly - It's up to you whether you continue to pay the council tax until such time it becomes the lenders liability.
    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • Annie35
    • By Annie35 7th Sep 17, 2:12 PM
    • 117 Posts
    • 78 Thanks
    Annie35
    • #5
    • 7th Sep 17, 2:12 PM
    • #5
    • 7th Sep 17, 2:12 PM
    thanks DD, i just didnt know if signing it means they take possession there & then? and bills wouldnt rack up :/
    • CIS
    • By CIS 7th Sep 17, 2:20 PM
    • 10,074 Posts
    • 5,755 Thanks
    CIS
    • #6
    • 7th Sep 17, 2:20 PM
    • #6
    • 7th Sep 17, 2:20 PM
    The problem with Council Tax is that the repossession and the process of getting there doesn't remove your Council Tax liability (i.e who pays) - when it's repossessed there's the Class L exemption, and you may get a discount whilst it's standing empty before that (depending on the Local Authority) but the actual liability remains with the owner so you need to make sure that you keep them updated (i.e, you need to claim the exemption etc) as the Local Authority will, correctly, chase you for any monies which end up being due before there is a legal chance of ownership. Council Tax liability will only transfer if the property is occupied, sold or actual ownership is otherwise transferred.

    There is legislation in place to allow the mortgage company who repossessed the property to become liable from the date however the legislation has never been brought in to force - the secretary of state could bring it in to force at any point but as yet hasn't.

    Craig
    I no longer work in Council Tax Recovery as I'm now a self employed Council Tax advisor and consultant with my own Council Tax consultancy business. My views are my own reading of the law and you should always check with the local authority in question.
    • debt doctor
    • By debt doctor 7th Sep 17, 2:45 PM
    • 4,171 Posts
    • 5,835 Thanks
    debt doctor
    • #7
    • 7th Sep 17, 2:45 PM
    • #7
    • 7th Sep 17, 2:45 PM
    thanks DD, i just didnt know if signing it means they take possession there & then? and bills wouldnt rack up :/
    Originally posted by Annie35
    I'm afraid it doesn't give you anything to sign a DOA.
    Is it not possible for you to go BR now? Every future debt incurred that is based upon a liability you have prior to BR will be covered by your earlier BR as a 'contingent liability' - including the council tax up until the new bill in April 2018 unless a new bill is issued as the owner of an empty property. Do c/tax know you have left?
    DD
    Last edited by debt doctor; 07-09-2017 at 2:47 PM.
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • debt doctor
    • By debt doctor 7th Sep 17, 2:52 PM
    • 4,171 Posts
    • 5,835 Thanks
    debt doctor
    • #8
    • 7th Sep 17, 2:52 PM
    • #8
    • 7th Sep 17, 2:52 PM
    Hi CIS,


    As there is no resident, the liability falls to the owner - what about when the ownership is joint with the HA?
    Can they apportion 50/50 - or would the other 50% come under the 'material interest' rules in that the op has a material interest in the tenancy?
    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
    • CIS
    • By CIS 7th Sep 17, 4:28 PM
    • 10,074 Posts
    • 5,755 Thanks
    CIS
    • #9
    • 7th Sep 17, 4:28 PM
    • #9
    • 7th Sep 17, 4:28 PM
    Hi CIS,


    As there is no resident, the liability falls to the owner - what about when the ownership is joint with the HA?
    Can they apportion 50/50 - or would the other 50% come under the 'material interest' rules in that the op has a material interest in the tenancy?
    DD
    Originally posted by debt doctor
    Interesting question that's got me thinking (and an issue you don't actually see raised very often).

    The council tax charge won't be apportioned between joint owners - the council may choose to pursue one and stop when they get 50% from them but they'd still remain jointly liable for the other 50%.

    For non-residents then Section 6(2)(f) of the LGFA92 states regarding liability :
    (f) he is the owner of the dwelling.
    The owner has the material interest in the property and there's no one which is inferior to theirs.
    "material interest" means a freehold interest or a leasehold interest which was granted for a term of six months or more;
    If the Housing Association had a joint freehold or leasehold interest in the property then they are no different to any other joint leaseholder / freeholder on a property and so should be jointly liable in cases it falls on the owner but it all depends on exactly what the position with the relevant legal interests were to figure it all out.

    To quote a valuation tribunal decision:
    In the law of real property, there is often more than one person with a material interest in the same property. The person with the inferior interest is the owner for the purposes of council tax. To put this into context, if the person who holds the freehold interest lets the appeal dwelling to another person on a lease of six months or more, the latter will have the inferior material interest and be the liable person for the council tax.

    Craig
    Last edited by CIS; 07-09-2017 at 4:33 PM.
    I no longer work in Council Tax Recovery as I'm now a self employed Council Tax advisor and consultant with my own Council Tax consultancy business. My views are my own reading of the law and you should always check with the local authority in question.
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