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Tax credits question

Hello! Just been reading an older thread re tax credits, I am horrified to hear some people's tax credits have been stopped while they are bankrupt. I was hoping to include a £500 overpayment from 04-05 and a £2000 overpayment for 09-10 (this one I disputed and they insist it cannot be written off...I still think I'm right :(). This years overpayment occurred because I told them I stopped paying my childminder and started paying pre-school, they insist I only told them about pre-sch and not childminder so therefore overpaid. I guess its my word against theirs that I phoned and said that unless they record every call.

So, (I'm sorry to keep waffling) - can these be included or will I stop getting my tax credits, which are my life line?

Comments

  • sizzler
    sizzler Posts: 5,094 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hi unsure so bumping for you:D
  • skylight
    skylight Posts: 10,716 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Home Insurance Hacker!
    09-10 cannot be included right now. Because at the moment it's not an overpayment.
    We are in period 09-10 and they cannot work out what you owe until you complete the final declaration forms they send you (anything from April through to July!) and they then work out if you owe anything. At the moment it is not a proveable debt and won't be for some time.

    As long as the 04-05 is an amount from the final declaration then that can be included in your BR.
  • Thank you for your replies. Any knowledge of tax credits stopping your payments if you include an overpayment in your bankruptcy?
  • skylight
    skylight Posts: 10,716 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Home Insurance Hacker!
    They shouldn't stop just becuase you have included a debt.

    But benefits are a bit odd and I believe they can regard them as open until your discharge (at which point then they are not collectable anymore) which is perhaps why some people have them stopped. Or they are not owed any money any more (circumstances change etc). There are lots of reasons they can stop but each case is on its own merits.
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    The can deduct from your current payment while you are undischarged to cover any overpayment. If the overpayment is covered by your BR then those deductions should stop when you are finally discharged.

    They shouldn't however deduct so much that it puts you into "financial hardship". Not sure how you define or enforce that. May be worth asking debt doctor. I think he posted about it recently?
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  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    fermi wrote: »
    The can deduct from your current payment while you are undischarged to cover any overpayment. If the overpayment is covered by your BR then those deductions should stop when you are finally discharged.

    They shouldn't however deduct so much that it puts you into "financial hardship". Not sure how you define or enforce that. May be worth asking debt doctor. I think he posted about it recently?

    I agree with Fermi, in addition, if you are reliant on Income support, Income based jsa, esa or pension guarentee credit then they should not recover more than 10% of the weekly on going award.

    If not on those benefits then a financial statement showing reasonable living costs should be presented.

    Further if the 'status' of the claim has changed ie the o/p was from a joint claim and now your making a single claim (or vice versa) then no ongoing recovery from benefit can take place. (HMRC rules, not BR rules)

    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 ***
  • sadnblue
    sadnblue Posts: 83 Forumite
    HI , thanks for your thread , i hadn,t thought of tax credits and including it as a debt i,m owing £6.500 to them and it goes up each year asthey pay me a minimum amount each month , which they say they have to by law , i,ve asked for that to be stopped numerous times but the,ve said no which seems crazy to me .
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