council tax and bankruptcy.

Euphoria1z

Hi

i was under the impression that debt that existed before bankruptcy would fall under the bankruptcy and debt created afterwards would not?

Here is a response from the local council

"""For any Council Tax due up to and including the date of bankruptcy, we will submit a claim to your trustee in bankruptcy, we will not continue to pursue you directly for the debt. A separate Council Tax account will then be created from the following day, for which you will be liable in the normal fashion.

When a property is repossessed, an exemption is awarded from the date of repossession until the property is sold, though the liable party remains named as liable, we do not name the mortgage lender as liable.

So, for example, if you were to be bankrupt on 31st October, we would submit a claim to your trustee for any Council Tax due up to that date, and issue you a new Bill, with 10% discount, for your liability from 1st November onwards. If the property were then to then be repossessed on 1st December, an exemption would apply from that date, so you would be liable, with 10% discount, for the period 1st to 30th November only."""


Now, unless im reading it wrong, the above example seems to suggest that you will still be held liable for council tax from when your bankrupt till when the property is repossessed and only debt prior to the bankruptcy will be wiped?? surely the whole council tax is an existing debt therefore should not continue after your bankrupt?


thanks

Flapjackman

I agree with you. Council tax is due in advance...therfore you already owe them £XXX for the full year. The full debt should be written off and a new bill issued in April 2013 for that year.

"For any Council Tax due up to and including the date of bankruptcy, we will submit a claim to your trustee in bankruptcy, we will not continue to pursue you directly for the debt. A separate Council Tax account will then be created from the following day, for which you will be liable in the normal fashion."

This statement is irrelevent. At any given date in the current year you owe the full amount minus what you have already paid.

Speak to the OR

PippaGirl_2

I have understood it to be as the letter says. Everyone is liable for council tax for every day they reside in a property (or own it) and though they may wipe old debt up to BR you would be liable from the day after. I've certainly been held liable here and I've not heard of anybody who has not had to continue to pay council tax for the rest of the tax year after BR, if that had been the case I think I would have heard about it.

PippaGirl_2

Adding, it is exactly the same with water. You get a water bill for the whole year with the option of paying that monthly in installments, when you go BR they clear the slate and you are liable from the day after BR onwards.

Mouse1812

PippaGirl is 100% correct. The bill might come up front, but you get a refund (or credit) if you move out.

coolcait

Council Tax can be included in bankruptcy in some circumstances - where you have defaulted on several monthly installments, and lost the right to pay that way.

In Scotland, you will have been served with a summary warrant at that point, and the full year's council tax will be due immediately. At that point, what is left of the current year's CT can be included in the bankruptcy. The next year's CT does however have to be paid as normal.

That said, much seems to depend on the individual council's approach!

Mouse1812

Council tax is an annual charge, go bankrupt on day 52 in the year and and any arrears out of the 52/365 charge go into bankruptcy. The balance is due for post bankruptcy life. Simples.

debt_doctor

In some cases, future payments of council tax are included in bankruptcy.
If you have received a final demand (typically after the second missed instalment plus 7 days) or had a liability order issued then the whole years council tax is included in the bankruptcy which may well be future instalments.
Water (Rates based, not metered) is payable on the 1st April each year, and if you go bankrupt after that date then the whole year is included in the bankruptcy. (no matter what their 'policy' might say).
DD

PippaGirl_2

So can I stop paying for my water rates?!

debt_doctor

PippaGirl wrote: »

So can I stop paying for my water rates?!

Well now......... We (our CAB office) had a great big battle with our local water company, who claimed they could apportion the bill after BR as it said so in their 'policy' - to some extent this is reflected in the technical manual.
I'm never interested in policy, i'm only interested in the law, so we had a battle with their legal team, and eventually they backed down and accepted that our position was correct. Our OR also agreed with us. We also had the same battle (and won) with DROs.
You may have a similar battle - the water company threatened to take all of our clients to court - but they never did.

DD

PippaGirl_2

I'm chicken, I'll keep paying!