tax credit lump sum

screwedpocket

Hi
I went bankrupt on the 25th of jan this year. I have just received the final bank statement from the halifax which was overdrawn and part of my debts.

There was a payment from the working tax credit made on the 11th of feb of this year.

This was a back dated payment from the last few years. I had not updated the tax credit people with my new co op account.

the halifax account is now closed but i was wondering if i could get the money out due to the fact that tax credits are a benefit.

I dont think i have much of a chance as the bank account is now closed but i was going to use that money to help with my car insurance mot ect.

any help would really help
thank you

Angiepange

Hi

I think you need to contact your OR about this and see what they advise. If the account is now closed I can't see how you could access it anyway and when you went BR you signed over all control of any accounts to the OR, so really best to speak to them first. Let us know how you get on

screwedpocket

thanks for your help
Just called the or and they said that as it was a lump sum it would go to the creditors if they were able to get the money back form the halifax.

i am going to write a letter just to check that is the only decision that can be made.

debt_doctor

From the technical manual...........

30.113 Tax credits
Where a bankrupt receives arrears of tax credits for a period prior to or post the date of the bankruptcy order, the tax credits are only available to the trustee once they are paid to the bankrupt and therefore notwithstanding the fact that the payments may relate to a period prior to the bankruptcy order the funds do not automatically vest in the trustee. The tax credits should be treated as part of the bankrupt’s income and be included in any calculation for an IPA/IPO. Any lump sum received can also be claimed through an IPA/IPO when received by the bankrupt. It is possible to claim the lump sum as a ‘single payment’ IPA/IPO but consideration needs to be given to the reasonable domestic needs of the bankrupt and his family. This applies equally to Child Tax credits and, other tax credits, (see Chapter 31.7).

I read that as they can claim the monies under an IPA not as an asset. This means they must take in to account your reasonable domestic need for that money - I think thats worth arguing for.

DD

screwedpocket

i think i just about got that legalese. It was a large sum of money that went back some years as they had not been paying me correctly.

I think the or may have trouble getting the Halifax to pay the money back. From what the lady said on the phone i dont really have a chance.

But i am not giving it just yet.

thanks for the post