sadly no alone Bancruptcy and council tax just like me Belinda W

Belinda_W

debt
Alarm at rush to bankrupt council tax debtors

Councils are getting tough over arrears of little as £1,200 - because they're worried about yearly performance targets. Jamie Elliott reports

• The Observer,<LI class=date>Sunday February 10, 2008
• Article history

Local authorities are rushing to make people bankrupt and repossessing homes for non-payment of small amounts of council tax in a bid to meet government targets.
According to Citizens Advice, some councils are bypassing alternatives to bankruptcy and putting people's homes at risk because other methods - such as putting a charge on someone's property or negotiating a payment schedule - take too long and don't help them meet council tax collection targets. 'The performance targets say councils must collect the tax in the year it becomes due,' says Peter Tutton, social policy officer for Citizens Advice. 'We see councils failing to seek a negotiated settlement with a defaulter and going straight to enforcement, including bankruptcy, with the potential loss of the home. We have a case in Manchester where a family has been ordered to sell their home for a debt of just £1,200.'
Jill Hankey of the independent Bankruptcy Advisory Service claims the problem is not confined to just a few authorities. 'We are being approached every week by an increasing number of people from all over the UK who are facing the loss of their home because of council tax arrears. They often don't realise that the high cost of bankruptcy can result in the loss of their property,' she says.
Philip Knowles expects to lose his £110,000 home in Bradford because the council has made him bankrupt for a council tax debt of £1,400. Mr Knowles says the council did not explore any other repayment options: 'The first I knew about it was when the Official Receiver phoned me up and told me I had been made bankrupt in my absence.'
Like many bankrupts, Mr Knowles has to pay legal fees and costs - in his case totalling £6,903 - that far outstrip the original debt. 'I can't see any way of keeping the house because, with the costs of the bankruptcy and other debts, I now owe in total around £12,000 and I just can't get hold of that sort of money.'
Mr Knowles was in the process of breaking up with his partner and left the family home temporarily in October and November, when the bankruptcy notice was served. He will have to move in with his parents when the house is sold. 'My two children stay with me in the house every weekend. I don't know what will happen when it's gone,' he says.
Martin Stubbs of Bradford council says:...#8239;'We only started bankruptcy action after Mr Knowles made and broke a number of arrangements to pay. We made further efforts to contact Mr Knowles but again he failed to respond and we again issued a statutory demand in May 2006, but we had no response.
'In September 2006 we applied to the court for what is called an "order of substituted service". This meant that the service of a statutory demand would be valid if it was sent by first class post. We sent the demand by first class post and this was followed by the bankruptcy petition and he was declared bankrupt in November 2006. A business rates debt has also been included in the debt.
'Bankruptcy action is a last resort for the council and we consider a number of criteria, and try and help people as much as we can, before this action is taken.'
Even when councils are willing to agree a repayment schedule, the pressure to clear the debt by the end of the financial year can mean they demand unrealistic monthly repayments. Nisar Afsar, an adviser at Bradford Debt Unit, has been negotiating with Bradford council on behalf of a mother-of-three on a low income who was petitioned for bankruptcy for a council tax debt of £1,700.
'The council agreed not to make our client bankrupt, but because they wanted the debt cleared by 31 March, they initially demanded she repay £400 a month. This is a lot for anyone, but impossible when you're not earning much,' he says.
Elderly people and those with physical or mental health problems are especially at risk of losing their home because they may not understand, or simply ignore, the consequences of council tax reminders. John Lynch, who suffers from diabetes, arthritis and severe stress, ignored demands that piled up over a period of two years and, as a result, was made bankrupt by Fife council in May last year for a council tax debt of £2,087.
Mr Lynch, 63, had bought his home in Scotland outright in preparation for his retirement. But when he moved there from London in 2000, he was the victim of incessant thefts and vandalism, and by 2007 had virtually abandoned the property, preferring to stay with friends.
'It all got on top of me and I didn't deal with any of the letters until January this year, when I happened to open one that told me that I had been made bankrupt and was to be evicted,' he says.
Mr Lynch's home is now set to be sold unless he can pay the original debt plus legal fees and costs of £11,887.50. Anne Muir for Fife Council says: 'We support those in genuine need and offer different ways to settle council tax bills. If, despite reminders and notices, we don't receive payment, a summary warrant allows us to decide the best course of action.'
Fife Council made 32 people bankrupt for non-payment of council tax in 2006/07, up from 28 the previous year.
Julia Goldsworthy, the Liberal Democrat spokesman for communities and local government, is worried that other parts of government may follow this lead. 'Making people bankrupt for council tax arrears sets a dangerous precedent which we would not want to see extended to other areas such as the Child Support Agency or tax credits overpayments,' she says.
· Citizens Advice, https://www.adviceguide.org.uk; Consumer Credit Counselling Service, 0800 138 1111, https://www.cccs.co.uk; Bankruptcy Advisory Service, 01482 633034/5, www.bankruptcyadvisoryservice.co.uk

SuziQ

In the cases above,those not paying their council tax were given options and the council issued various latters and went through the legal process to recover their money.
You stated you had refused to pay your CT as they hadn't given you a single adult reduction,and that you hadn't opened letters.
Had you taken advice re the disagreement with your Council?

According to the article above and your own cirumstances, the CT remained unpaid,so what are the council to do about non-payment? I had to negotiate to repay mine by card,bit by bit last year as I wasn't recieving my wages due to the business I worked for having cash flow problems. Because I kept a dialogue up and regularly made payments-no matter how small,the council allowed me the time and I finally finished paying mid-april this year.
I believe most problems occur when people fail to keep a dialogue with the people they owe money to/fail to stick to an agreement. I expect not just councils,but many other businesses-power providers,loan companies etc will be just as determined in the current and potential climate as non of them want to have a debt reneged on.

Belinda_W

Yes I did take advise with my with the national debt line service and I did what they suggested which was to put pen to paper which I have kept. They are very good at saying they will get back to you but dont.

I cant even begin to calculate the hours of correspondance letters and phone call that I made to the council, but they would never get back to me. I think it was one of those cases that as soon as they searched the file they wanted to drop like a hot potato

I can remember on one occasion to receiving the summons at the magistrates court for my council tax bill and when I arrived at then sat there for a good few hours a woman came over to me and asked if i was all right and was I due to go up before the magistrate. I replied yes it is over council tax. She replied "oh you are not meant to turn up and you are not allowed in and told me to go which reluctanty I did. I can remember now thinking how wrong and unfair it was to not be able to but my case forward and have my say

OrkneyStar

If you have any difficulties with council tax, be it wrong amounts charged, not being able to pay, or anything else, contact the CAB (or other independent agency) and get them to intervene on your behalf, that way the council will know that there is a bigger picture and hopefully hold any action until it is sorted out. In the meantime make some payments, even if not all! If you simply don't pay anything they have to eventually do something in order to make you pay as its not a choice to pay CT. I know it has maybe gone too far for some people to do this, sorry for you in that circumstance and I hope you get something sorted out .