Random Sunday Afternoon Worry - Tax Credits

diablobear

Hi there guys

As some of you know I went BR in May 2007 and discharged in May 2008.

I'm probably getting ahead of myself here. This week I received a letter from Tax Credits who have decided to embark on an enquiry into my 06/07 claim. I can't help worrying as from 2005 to 2007 my affairs were a complicated mess with a lot of income and circutmstance changes, and a load of other problems.

If and only if they decide that there was an overpayment in O6/07 then am I right to understand it works as follows.

In normal circumstances if a tax credit overpayment debt is outstanding prior to bankruptcy then the overpayment can be recovered from your current award up until discharge or if a joint claim recovered from the partner who is not BR
So
What happens if you have already been discharged??
If tax credits decide after their enquiry into 06/07 that there was an overpayment prior to my bankruptcy, will it be included as a bankruptcy debt?

I've looked around for a difinitive answer and from what I've read I've come to the conclusion that it will not be included and will become a fresh new debt as the notice of recovery will be dated after my discharge date. Even though the overpayment was actually made prior to my BR.

Just wondered if anyone actually knows or agrees that this is the case? As the conspiracy theorist in me is now thinking, they have only started this enquiry now and not before, as they now know that I was discharged in May.
Wow, the paranoia still doesn't go away even after BR!!!

fiveyearplan

Sorry Diablobear I don't know the answer but I think the whole tax credit system is a shambles, I've just applied out of sheer necessity and didn't want to apply because of all the nightmare stories I've heard where they got it wrong.

diablobear

I know what you mean fiveyear :rolleyes:

CherylOB

They sent me the same letter and I can't help but worry either.. It just seems that as you are beginning to see the light at the end of the tunnel that something else crops up. Lets keep our fingers cross that all is ok..

mazzatee

Hi diablobear

Its bad new I'm afraid as I think you would be liable for the debt. The ruling is set out as follows:


Category
Award made
Award paid
Recovery decision

1

Before B/O
Before B/O
Before B/O

2

Before B/O
Before B/O
After B/O

3

Before B/O
After B/O
After B/O

4

After B/O
After B/O
After B/O



Category 1 can definitely be included in bankruptcy but the other 3 cannot! I would think that you would fall into category 2 so not included!

I hope when they do the review there is nothing owing! Have fingers crossed for you.

mazzatee

Hi

Table did not post properly! The headings were;
award made
Award paid
Recovery decision

diablobear

Thanks for your replies guys - I am trying hard not to worry, as why worry about something that may not even happen? but it's easier said than done. When I went BR I breathed a heavy sigh of relief, that it was all over and then something like this turns up & feelings of "when will this ever end" come round again.

Hope it's OK for all of us Cheryl, there's quite a few on the benefits board who got the same letter, same year within the last few weeks, so I guess it's just that time of year for enquiries for 06/07! So I am really hoping it is just routine and not because they think something is wrong.

Thanks Maztee - I coudn't really understand the table but I'm guessing that if there is something to be paid back, their error or mine, then it won't be a debt before my BR, even though the year they are looking at was for the year prior to my BR, so I'm just going to sit tight & wait. You never know I could be worrying over nothing - I just have a nagging feeling that due to all my changes back then something was missed!