Rate payments, can they be included in Bankruptcy?

live'n'learn

As I have made the decision of letting the bank take my home I have also got behind in Council Rate payments so does anyone know if they can be included in my Bankruptcy or will it have to be paid no matter what??

mel12

I think you can include previous years debts but not the current council tax for this year, hopefully someone can confirm if this is correct?

BB&B

If you have missed two instalments plus 7 days

or

had a liability order issued

then

the whole council tax for the current year (including any, as yet, unpaid instalments) will be part of your bankruptcy as well as previous unpaid years

Tim

CIS

You can include the whole of the current year if the amount for this year has become due in full :

Received a 1st or 2nd reminder and not paid the requested amount in full within 7 days (doesn't have to be 2 instalments missed, it can be only 1)
or
Received a final notice (correction to my post - it becomes due in full as soon as the F/Notice us issued)
or
A Court Summons has been issued
or
A Liability Order has already been granted

BB&B

@CIS

Slightly confuddled at this end, in our office we have been instructed that if only one instalment has been missed then only that instalment can be included in bankruptcy, and the bankrupt would then be liable for the rest of the year?

Apparently this has been covered in a HBC (I'll try and find it for you)

Confuddled Tim

sugarbabe-47

Hi all
I went B/R in Nov 2008 and included my C/T Arrears in my B/R, however my Council charged me from Nov 2009-March2010? I have since found out that this is true to many councils. Just a thought!
Sugar x

now

BB&B wrote: »

If you have missed two instalments plus 7 days

or

had a liability order issued

then

the whole council tax for the current year (including any, as yet, unpaid instalments) will be part of your bankruptcy as well as previous unpaid years

Tim

Not so in our case, we only wrote off what was due up to and including or BR, I had to pay all insatlments due from November through to March

CIS

Not so in our case, we only wrote off what was due up to and including or BR, I had to pay all insatlments due from November through to March

This is the way it was done by most councils but approx 18 months or so ago the OR confirmed with the local authority that I work for that once it had become due in full before the bankruptcy then the full years charge can be claimed in the bankruptcy

Slightly confuddled at this end, in our office we have been instructed that if only one instalment has been missed then only that instalment can be included in bankruptcy, and the bankrupt would then be liable for the rest of the year?

The OR confirmed with us that once the balance has become due in full then its a debt that can be covered in full by the bankruptcy.

The fact its a first instalment that's been missed has no special relevance - a missed instalment is a missed instalment whether its the first or second. (obsioulsy the 3rd onwards would be covered by a final notice at which point its due in full anyway).

The actual OR guidance on their website states

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.

but as I say they have confirmed with us that its not just the Liability Order stage, its once its become due in full at any point.

BB&B

OK just to finally try and put this one to bed, the information from CIS is correct, however ........

Unfortunately there is still variations around the Insolvency Regions, where some offices and councils interpret the rules one way , others have slightly different interpretations.

So this is going to be a grey area with missed payments, etc.

What does appear common though is:

If a Liability Order has been Issued
or
A court Summons has been issued
or
Bailiff Action has been commenced to collect

Then the WHOLE of that years Council Tax SHOULD be included (though you may have to 'discuss' this with your local council, as some seem to think otherwise despite having been informed of this!!)

Where the confusion lies is with the missed payments, some offices are saying that one missed payment means all is included, other are saying 2 plus 7 days. AND this is also happening with some councils!!

The only clear way to ensure it is included is to get a liability or court summons, because if it is missed payment though it SHOULD be included it MAY NOT be included.

Sorry it couldn't be any clear than this, but as we discuss this off board, regional variations have shown up, and some have been quite sever!.

A lot of this confusion is down to legislation, and the contradictions between Council Tax Laws and Insolvency Laws

Tim

sugarbabe-47

BB&B wrote: »

Unfortunately there is still variations around the Insolvency Regions, where some offices and councils interpret the rules one way , others have slightly different interpretations. Yes I agree

So this is going to be a grey area with missed payments, etc.

What does appear common though is:

If a Liability Order has been Issued
or
A court Summons has been issued
or
Bailiff Action has been commenced to collect

Then the WHOLE of that years Council Tax SHOULD be included (though you may have to 'discuss' this with your local council, as some seem to think otherwise despite having been informed of this!!)
In my case I had a liability order and the WHOLE years C/T was included in my B/R, HOWEVER, my Council sent me a bill from the day AFTER my discharge date, Nov - march :eek: with the threat of court action again!! I didn't know any better and just paid it.....:mad:
Where the confusion lies is with the missed payments, some offices are saying that one missed payment means all is included, other are saying 2 plus 7 days. AND this is also happening with some councils!!

The only clear way to ensure it is included is to get a liability or court summons, because if it is missed payment though it SHOULD be included it MAY NOT be included. as you say MAY NOT....

Sorry it couldn't be any clear than this, but as we discuss this off board, regional variations have shown up, and some have been quite sever!.

A lot of this confusion is down to legislation, and the contradictions between Council Tax Laws and Insolvency Laws - VERY TRUE!!
Tim

It is frightening/upsetting and confusing going B/R and then to be told conflicting advise does confuse even further. I for one didn't understand half of what went on with my B/R and then to have a C/T bill slapped through my letterbox (with a court threat!) was very upsetting, as I was led to believe I didn't have to pay that years C/T I just paid because I didnt know any better and I hadn't got any fight left in me, going B/R nearly tipped me over the edge mentally-Oh well older and wiser and all that

live'n'learn

Thanks everyone for your input!!

As i am from N.Ireland i was not sure if rates that i pay as a homeowner was the same as Council Tax paid on the mainland though i thought it was.

I am 2 payments behind at the moment and expect to go bankrupt in the first few months of 2011.

It certainly going to be a challenging 2011

Merry Christmas to everyone on this forum!