"Debts included in Bankrupcy"

Bakeybadoo

Jonto wrote: »

Just because you don't include something on your SOA doesn't mean it isn't included in your bankruptcy. On the date the B/O is made it crystalises your financial estate and anything that is outstanding whether you told the OR of not will vest in the estate.

How true is that? I'm not doubting you but that would be interesting to find out for sure.

fermi

Bakeybadoo wrote: »

How true is that? I'm not doubting you but that would be interesting to find out for sure.

It has to be true from a legal point of view.

The best example is if a creditor makes you bankrupt. They will submit a petition to the court, but as they do not have access to all your financial details it will only include the debts to that creditor.
However, if you are then made bankrupt, all your debts (apart from the exempt ones) are included and dealt with by the official receiver. They will request the details of them after the BR order has been made.

This also provides protection to those who are a bit less organised, and simply forget to put something on their SOA.

user55

So in theory at least, when I become bankrupt, my "debt" of the tax credit overpayment should be included. So in theory, they should then start paying me what I am allegedly entitled to?

I can't see it happening.

rog2

user55 wrote: »

So in theory at least, when I become bankrupt, my "debt" of the tax credit overpayment should be included. So in theory, they should then start paying me what I am allegedly entitled to?

I can't see it happening.

You are absolutely right user, it doesn't happen. Before my bankruptcy I tried to register for JSA and was refused. After my bankruptcy I was again refused.
You can fight the 'machine' but it's very difficult to win.

fermi

user55 wrote: »

So in theory at least, when I become bankrupt, my "debt" of the tax credit overpayment should be included. So in theory, they should then start paying me what I am allegedly entitled to?

I can't see it happening.

Does this bit in my first post on what is not included apply to tax credits?

* benefit overpayments, where the Department for Work and Pensions (DWP) can recover any benefit overpayments from any further benefits you receive.

fermi

Just found this:

77.50 Recovery of overpaid credits after a bankruptcy order is made

In certain circumstances a tax credit may be overpaid and thereafter a recovery may be sought by HMRC. That recovery may be achieved by deductions made from ongoing awards of tax credits or by direct collection where there is no ongoing award of tax credits or where the ongoing award has ceased.

Where tax credits have been overpaid and a bankruptcy order is subsequently made against the claimant, whether or not the overpayment is a provable debt in the bankruptcy depends on the circumstances of the case as follows:

Final award notice (of repayment) issued before the date of the bankruptcy order.

* If the recovery is made, or would have been made, by direct collection (in cases where there is no ongoing award of tax credits), HMRC will submit a proof of debt in the bankruptcy, considering the debt to be a provable one.

* If the recovery is made, or would propose to have been made, by deductions from ongoing awards of tax credits, HMRC will not submit a proof of debt in the bankruptcy but will continue to make the collections from the ongoing award of tax credits until the bankrupt’s discharge from bankruptcy. Thereafter the balance of the debt will be written off. This action, of continuing to recover the debt post bankruptcy, follows the decision in the case of R v Secretary of State for Social Security, Ex Parte Taylor and Chapman [note 1] which provided that where a bankrupt was indebted to the Secretary of State for Social Security in respect of debts arising from earlier receipts of social security benefits, he/she was entitled to deduct sums from future benefits to be received thereafter in reduction of that indebtedness. Should any bankrupt object to the taking of the ongoing recovery action by HMRC in this way, they should be referred to that Department without further comment by the official receiver.

In all cases where a final award notice (of repayment) has been issued by HMRC before the date of the bankruptcy order, the debt should be added to the list of creditors and HMRC treated by the official receiver as a creditor in the usual way.


Final award notice (of repayment) issued after the date of the bankruptcy order.

* Where a final award notice (of repayment) is issued by HMRC after the date of a bankruptcy order, whether the recovery action be considered by direct collection or from the ongoing award of tax credits, the bankrupt will be pursued by HMRC in the usual way even though the over-paid tax credits arose before the date of the bankruptcy order. This follows the decision in R (on the application of David William Steele) v Secretary of State for Work and Pensions [note 2]. In these circumstances the debt will not be included in the list of creditors. See also Chapter 40 Part 6 - Creditors and liabilities.

Should the official receiver require information on how HMRC intends to treat tax credit overpayments in individual voluntary arrangements, the official receiver should contact Technical Section directly for this information.

77. 51 Set-off and joint claimants

Where appropriate, HMRC will claim set-off in respect of monies it owes to the bankrupt to reduce or extinguish the indebtedness for overpaid tax credits [note 3].

Where tax credits have been claimed by two persons, HMRC will pursue the non-bankrupt person, if any, to recover the overpayment and if the intended recovery procedure is direct collection, it will also submit a proof of debt in the bankruptcy (as appropriate) (see paragraph 77.50), but it will not recover more than 100p in the £ of its debt (from both sources). Where the intended recovery action is deductions from ongoing tax credits, that will continue as far as the non-bankrupt claimant is concerned but a proof of debt will not be submitted in the bankruptcy. This follows an operational decision made by HMRC.

77.52 Contact with HMRC in respect of Tax Credits

There should be no need for official receivers to contact the Tax Credits Office of HMRC directly as claims to be submitted in bankruptcy cases will be prepared and lodged by the Insolvency Claims Handling Unit (ICHU) in Newcastle upon Tyne which co-ordinates and assembles claims to be lodged in insolvencies for the majority of the taxes formerly collected by the Inland Revenue. Where a bankrupt has listed the Tax Credits Office on a statement of affairs or similar creditors’ details, any correspondence regarding that debt should be addressed to the ICHU.

user55

They won't recover more than 100p in the £.

That's reassuring LOL!

fermi

user55 wrote: »

They won't recover more than 100p in the £.

That's reassuring LOL!

I hadn't noticed that bit.:rotfl:

You can tell it was written by a Civil Servant!

rog2

fermi wrote: »

You can tell it was written by a Civil Servant!

How true. :rolleyes:
I suppose that they mean that you would not get any interest payments on anything due.