Council tax and water in bankruptcy

maliah

Hi,

Can i ask and im going to sound stupid we are going to go br asap, not sure on dates but we are moving to a private rent, but could be months for repossession of our house, as only 2 months in a arrears,

We havent paid any council ax this year and i missed one payment last year and several the year before i think altogether i owe £1700 so am i right in understanding this can go into my br?

and also water? ive always paid this and am up to date with it by DD do i contiune to pay it?

thanks all

dollparts

ok, I may have missed something so please humour me.

I am not behind with my CT nor my water. (metered)

I do not have to include these in my BR.

Right or wrong?

The house I'm moving to-am not sure yet if it's metered or fixed rate per year.

Does it make a difference what type of meter I have?

MicheH

dollparts wrote: »

ok, I may have missed something so please humour me.

I am not behind with my CT nor my water. (metered)

I do not have to include these in my BR.

Right or wrong?

The house I'm moving to-am not sure yet if it's metered or fixed rate per year.

Does it make a difference what type of meter I have?

Nah, i'm up to date with my utilities and havn't included them any where. I just set up new direct debits with my new account details and everything is ticking along as before. Nothing to do with bankruptcy if everythings up to date in my experience dollparts.

blind-as-a-bat_2

debt_doctor wrote: »

..... and just to complicate things, in c/tax, if you have 'similar hierarchy' you are LIABLE whether your name is on the c/tax bill or not !! This can happen when joint owners or joint tenants are both liable but only one person registered with the council.

My job is such fun !!

DD

Not according to my council tax office:rolleyes:

Had that argument when my wife fell ill and a payment was missed, and threat of court was issued, i tried to deal with it, but because of the DPA, they would not talk to me.

When i pointed out that i was as liable for it as her, so refuseing to let me sort it was stupid, they denied i would be liable in any way, even if she went BR

They dont even know there own rules:rolleyes:

Droopyk

Hi.

With regards to the water, i went BR in Nov, so the bill was dated until Mar, do i have a claim to get money back as i was told by the water comp, that i was not allowed to include it in my BR?.

Thanks Karl

dollparts

MicheH wrote: »

Nah, i'm up to date with my utilities and havn't included them any where. I just set up new direct debits with my new account details and everything is ticking along as before. Nothing to do with bankruptcy if everythings up to date in my experience dollparts.

That's what I thought, and had hoped for. I just assumed that you would not need to include utilities if you were not in arrears. I know CT is a bit of a grey area but tbh, since I was not behind with it it hasn't concerned me until now

Oh, now I'm confused

fiveyearplan

maliah wrote: »

Hi,

Can i ask and im going to sound stupid we are going to go br asap, not sure on dates but we are moving to a private rent, but could be months for repossession of our house, as only 2 months in a arrears,

We havent paid any council ax this year and i missed one payment last year and several the year before i think altogether i owe £1700 so am i right in understanding this can go into my br?

and also water? ive always paid this and am up to date with it by DD do i contiune to pay it?

thanks all

Yes, continue to pay your utilities. If you aren't behind with the payment it will run as usual after BR.

Flowerpot_2

dollparts wrote: »

That's what I thought, and had hoped for. I just assumed that you would not need to include utilities if you were not in arrears. I know CT is a bit of a grey area but tbh, since I was not behind with it it hasn't concerned me until now

Oh, now I'm confused

Yep me too now!
Didn't include in my (or OH's) BR as not/never in arrears with either so I've continued to pay Water (monthly by account card @ P.O) & CT online as per usual.........haven't heard a dickie bird from either & the OR didn't mention it during interviews
FPx

debt_doctor

Hi,

Insolvency law does not allow BR's to pick and choose what debts they decide to put in !:rolleyes: However, in practice, people leave out c/tax and water because they dont know they can include it (or in some cases might not want to)and often the council / water company /local insolvency service dont know either. (especially for future payments till the end of the year in the circumstances mentioned in my original post)

I shall leave the explanation of Bankruptcy law to the insolvency service technical manual;


40.100A Water rates – where annual advanced charges apply
(June 2008)
Where water is supplied under a charges scheme that is rate-based rather than metered, the charges scheme may provide that any standing charges are due and payable in advance, generally on 1 April each year. Therefore, the whole of that year’s charge, or unpaid balance at the date of the winding-up order or bankruptcy order, may be claimed in the proceedings, in addition to any arrears from previous periods. As the whole debt becomes due prior to the insolvency, it is a provable debt as defined in paragraph 40.12.
Thus, in these circumstances, if a charge of £240 for water services made on a consumer is payable in full on 1 April 2008, and monthly payments of £20 are made on that day and on 1 May 2008, then a bankruptcy order is made against the consumer on 1 June 2008, the claim in the bankruptcy would be £200 (£240 - £40).
The water company cannot take steps to recover the balance of the debt, or to seek payment from a bankrupt for the continuing supply of water for the period covered by the pre bankruptcy advance charge. The water company can begin charging again on the 1 April following the making of the bankruptcy order for charges due on that date in advance for the following year but not the arrears. This should be taken into account by the official receiver in a bankruptcy when considering expenditure in the assessment of contributions to be made under an income payments order

and....

40.101 Council Tax
Each District Borough Council levies and collects a tax, called a council tax which is payable in respect of dwellings in its area. The occupiers of the dwellings have joint and several liability for council tax.
Council tax is charged on a yearly basis from 1 April each year URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#3"]Note 3[/URL but the liability to pay council tax is determined on a daily basis URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#4"]Note 4[/URL. The billing authority is required to make a demand for payment of the council tax separate to the notification of the amount of council tax and the tax becomes due when that demand is made but most council tax payers agree a statutory monthly payment scheme for payment of council tax URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#5"]Note 5[/URL.
Any amount due and unpaid under the instalment agreement prior to the insolvency order is an unsecured debt in the proceedings URL="http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch37-48/chapter40/part6/Notes/Notes.htm#6"]Note 6[/URL. If the bankrupt's council tax is up to date under the instalment agreement at the date of the bankruptcy order, no amount is provable in the bankruptcy as it relates to future occupation of the dwelling. Where a liability order has been obtained by the council, prior to the bankruptcy order being made the whole debt as notified within the liability order becomes due and it is therefore a provable debt as defined in paragraph 40.12.


In debt relief orders , the intermediary guidance notes state this;


[FONT=Arial, sans-serif]Water Rates[/FONT]


[FONT=Arial, sans-serif]The guidance in relation to bankruptcy and the effects on water rates is quite clear and there is no reason to believe that this guidance is not equally applicable to Debt Relief Orders.[/FONT]


[FONT=Arial, sans-serif]Where a debt is due and payable on a certain date, but is allowed to be discharged over a period up to the ensuing year, the amount of the debt is known as at the 1[/FONT][FONT=Arial, sans-serif]st[/FONT][FONT=Arial, sans-serif] April for the relevant billing year, that debt is a liquidated debt and thus capable of inclusion in a Debt relief Order.[/FONT]


[FONT=Arial, sans-serif]How a water rates bill will be dealt with will be dependant upon the charging regime operated by each provider, however where water is supplied under a charges scheme that is rate-based rather than metered, the charges scheme may provide that [/FONT][FONT=Arial, sans-serif]any standing charges are due and payable in advance, generally on 1 April each year. Therefore[/FONT][FONT=Arial, sans-serif],[/FONT][FONT=Arial, sans-serif] the whole of that year’s charge, or unpaid balance at the date of the Debt Relief Order, may be scheduled in the application, in addition to any arrears from previous periods. As the whole debt becomes due prior to the insolvency it is a qualifying debt.[/FONT]
[FONT=Arial, sans-serif]Charges for metered supplies are treated differently as, gener[/FONT][FONT=Arial, sans-serif]ally speaking, the meter will be read at or about the date of the Debt Relief Order and the amount to be scheduled in the DRO based on that reading. New supplies will be paid for when charged. [/FONT]
[FONT=Arial, sans-serif][/FONT]
[FONT=Arial, sans-serif][/FONT]
[FONT=Arial, sans-serif]Council tax[/FONT]
[FONT=Arial, sans-serif]Each District Borough Council levies and collects a tax, called a council tax which is payable in respect of dwellings in its area. The occupiers of the dwellings have joint and several liability for council tax.[/FONT]
[FONT=Arial, sans-serif]Council tax is charged on a yearly basis from 1 April each year but the liability to pay council tax is determined on a daily basis. The billing authority is required to make a demand for payment of the council tax separate to the notification of the amount of council tax and the tax becomes due when that demand is made but most council tax payers agree a statutory monthly payment scheme for payment of council tax. [/FONT]
[FONT=Arial, sans-serif]Any amount due and unpaid under the instalment agreement prior to the insolvency order is an unsecured debt in the proceedings . If the debtor’s council tax is up to date under the instalment agreement at the date of the debt relief order, no amount can be scheduled in the order as it relates to future occupation of the dwelling. Where a liability order has been obtained by the council, prior to the debt relief order being made the whole debt as notified within the liability order becomes due and it is therefore a qualifying debt.[/FONT]


Those entering in to DRO's need to be very, very careful about entering ongoing amounts for water and c/tax if the above applies as the IS may well disregard those ongoing payments, pushing them over £50 pm surplus income, dissallowing their DRO and losing their £90.

DD

debt_doctor

debt_doctor wrote: »

Hi,

Insolvency law does not allow BR's to pick and choose what debts they decide to put in !:rolleyes: However, in practice, people leave out c/tax and water because they dont know they can include it

I ONLY BITE CREDITORS !:D

I know many leave out the council tax and water for exactly the reason I stated above. My job is to look after the best interests of the client, so I use the legislation to save the client up to 10 months of c/tax and a full years ongoing water costs because if you are going BR then you might aswell have every 'advantage' it brings.

DD