New High Court ruling on Council tax/rates liability in bankruptcy/insolvency

debt_doctor

Hi,

The DRO unit have stated that the High Court Ruling does not apply to DRO's - but does to BR.
Rather strange as the ruling suggested that it would also apply to DROs but this appears to be the position at the moment.

DD

debt_doctor

Hi,

The DRO unit have stated that the High Court Ruling does not apply to DRO's - but does to BR.
Rather strange as the ruling suggested that it would also apply to DROs but this appears to be the position at the moment.

DD

fermi

Most odd DD. :huh: :think:

debt_doctor

fermi wrote: »

Most odd DD. :huh: :think:

Very odd. I see no logic in that statement - If the High Court has ruled that the whole amount is infact a debt on April 1st, then why cannot it be included?
Water is included in both insolvency regimes, And I can't see the difference between the two???

What I will say though, is that things change in 'DRO world' so often back and forth that a re think wouldn't surprise me.

DD

DorisTrousers

Do you have a link for the DRO Unit's announcement on this, if there is one?

fatbelly

There isn't an announcement as they don't see the need to make one. According to them, there has been no change to the position re Council Tax arrears in DROs and so no need to amend the existing guidance.

I am struggling to get my head around it, like the others.

longtermplanner

Illogical, as Spock would say ...

CIS

Presumably a matter of interpretation by the DRO unit - if they won't play ball and aren't given any orders from above then it would need another court case.

The actual ruling wasn't about bankruptcy (or CVA etc) - it was whether the full council tax charge becomes a debt as soon as it becomes due, that's either a yes or no answer. If it's a yes (as per the court case) then it's a debt and as such (subject to any restrictions) is included in the same way as any other debt.

I would re-contact them and point this out - ask them for a formal response as to their reasoning.

DorisTrousers

I have seen written confirmation this morning from the DRO Unit as to their position, and it is essentially this. The Council Tax for this year CAN go in, but the debtor can elect whether to put it in or not.


Intermediaries should of course pay proper heed as to whether, by including the liability, the disposable income of a debtor would rise above the £50 threshold.


That seems to be much more of a common sense position than previously suggested, but, reading between the lines, I do suspect that they would prefer it if it didn't go in a DRO at all however it is acknowledged, albeit indirectly, that their hands are tied somewhat.

DorisTrousers

As per the other thread on this, essentially the DRO Unit have now acknowledged that it does apply to DRO's, but with heed to be given as to whether, by including it, the £50 disposable income threshold would be exceeded.