Council Tax and BR

StoBoB

Hi guys.

For a long time I have been trying to deal with my debts and its getting to a point where I really don't see any way to deal with it anymore.

I've been advised bankruptcy is the only thing left for me now. The tipping point is my local council as I fell into arrears for my council tax and they have attachments with my employer. We agreed to pay £177 from my employer, plus the £123 a month for this years tax, I then moved out of the area for a fresh start in a new town. I informed the council of this and they have now said they will be taking the full £300 from my employer, leaving me with nothing to pay my new council tax. They have said that I have no right of appeal and it is entirely at their discretion how much they take, they are entitled to take up to roughly £815 a month from me if they wanted to. I have hated every interaction with the council, the revenues enforcement team and very callous and do not appreciate individual circumstances. I showed them my budget (which I had from CCCS/Stepchange) they ignored it. Instead of taking my offer of £70 which I could afford, they took a lot more.

My question is, if I go bankrupt, does this debt get included with that? Will the OR let me keep the family car thats on HP? Without it, I have no transport to and from work and my Wife will have no transport for the kids either.

I have completed a SOA if it helps anyone. I'm at the end of ability to cope with this now, everything is suffering in my personal life - I'm on edge all the time, I'm not interacting well with others including my wife and kids.

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 2611
Partners monthly income after tax....... 0
Benefits................................ 147
Other income............................ 0
Total monthly income.................... 2758

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 201
Rent.................................... 1000
Management charge (leasehold property).. 0
Council tax............................. 146
Electricity............................. 45
Gas..................................... 45
Oil..................................... 0
Water rates............................. 46
Telephone (land line)................... 16
Mobile phone............................ 70
TV Licence.............................. 13
Satellite/Cable TV...................... 0
Internet Services....................... 3.5
Groceries etc. ......................... 485
Clothing................................ 25
Petrol/diesel........................... 180
Road tax................................ 15
Car Insurance........................... 49
Car maintenance (including MOT)......... 18
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 125
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 66
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 10
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 20
Total monthly expenses.................. 2578.5


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 8425.....(201)......39
Total secured & HP debts...... 8425......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Thames Water...................1216.43...0.........0
Lowells - O2...................733.87....0.........0
Lowells - Vanquis..............2088......0.........0
Loan from family...............350.......0.........0
Council Tax arrears............2200......177.......0
Southern Electric..............1266.26...0.........0
Google Adwords.................46........0.........0
Wonga..........................1428.91...0.........0
Beachbody Insanity.............37........0.........0
BT Phone Bill..................381.......0.........0
Sky TV.........................56........0.........0
Housing benefit ...............2066.41...0.........0
Arrow Global / Wescot..........9639......0.........0
Santander......................1699......0.........0
Peugeot HP.....................1337......0.........0
Natwest credit card............1320......0.........0
Natwest account................2400......0.........0
Natwest loan...................6359......0.........0
British Gas....................1772.87...0.........0
Total unsecured debts..........36396.75..177.......-


Monthly Budget Summary
Total monthly income.................... 2,758
Expenses (including HP & secured debts). 2,578.5
Available for debt repayments........... 179.5
Monthly UNsecured debt repayments....... 177
Amount left after debt repayments....... 2.5

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -8,425
Total Unsecured debt.................... -36,396.75
Net Assets.............................. -44,821.75

Created using the SOA calculator at.
Reproduced on Moneysavingexpert with permission, using other browser.

egrescrimp

The council tax would indeed fall into your bankruptcy

With regards to the HP car, the OR may let you keep it but the HP company may take it back in which case you'll be allowed to purchase a car to meet your needs. Check with your HP provider what they will do if you go bankrupt, if they would take the car back its probably best to just give it back and purchase yourself a car for less than £1,000.

£25 for clothing is very low for 4 people, increase this to around £100.

Internet at £3.50 per month, I assume you are with TalkTalk so does your £16 under telephone cover your line rental or just calls?

Emergency fund should be £40.

Holiday fund of £60 (£20 per adult, £10 per child).

Prescriptions should be about £16 to cover 2 adults.

StoBoB

egrescrimp wrote: »

The council tax would indeed fall into your bankruptcy

With regards to the HP car, the OR may let you keep it but the HP company may take it back in which case you'll be allowed to purchase a car to meet your needs. Check with your HP provider what they will do if you go bankrupt, if they would take the car back its probably best to just give it back and purchase yourself a car for less than £1,000.

£25 for clothing is very low for 4 people, increase this to around £100.

Internet at £3.50 per month, I assume you are with TalkTalk so does your £16 under telephone cover your line rental or just calls?

Emergency fund should be £40.

Holiday fund of £60 (£20 per adult, £10 per child).

Prescriptions should be about £16 to cover 2 adults.

I've put amount that we need as a minimum to live on and in the last 3 months thats about right, but we do simply go without... My internet is indeed talk talk and my 16 is for line rental, we do not use the landline for calls we use mobiles as I am very rarely at home in the day - minutes are free on the mobiles and we're in contract for some time sadly.

The local council takes a lot out of my budget which doesn't leave much to portion to holiday funds etc - if I did that I would "spend" more than I receive a month, will the OR not just say I can't do that?

Are there any charities or grants that can help me with the funds to go BR at all? I'm really going to struggle to find the funds to actually register BR at this rate (Seems very odd you have to pay to go bankrupt when the cause of going bankrupt is you can't pay!)

egrescrimp

You don't want to be trying to make your SOA work based on a minimum, you want to position it so it's reasonable. Whatever you may of allocated in the past, isn't really relevant now so please keep that in mind with putting in the figures for your SOA. You may even find the OR increases them for you if they feel you've under estimated what you will need to live on.

Please keep in mind that all provable unsecured debts such as your council tax arrears would fall into the bankruptcy. According to your above SOA you've got room for making adjustments as you've £200 per month spare which if you didn't try and allocate would go into an IPA.

Please see the following for charities who will help with the fees https://forums.moneysavingexpert.com/discussion/4279781

National_Debtline

StoBoB wrote: »

Hi guys.

For a long time I have been trying to deal with my debts and its getting to a point where I really don't see any way to deal with it anymore.

I've been advised bankruptcy is the only thing left for me now. The tipping point is my local council as I fell into arrears for my council tax and they have attachments with my employer. We agreed to pay £177 from my employer, plus the £123 a month for this years tax, I then moved out of the area for a fresh start in a new town. I informed the council of this and they have now said they will be taking the full £300 from my employer, leaving me with nothing to pay my new council tax. They have said that I have no right of appeal and it is entirely at their discretion how much they take, they are entitled to take up to roughly £815 a month from me if they wanted to. I have hated every interaction with the council, the revenues enforcement team and very callous and do not appreciate individual circumstances. I showed them my budget (which I had from CCCS/Stepchange) they ignored it. Instead of taking my offer of £70 which I could afford, they took a lot more.

My question is, if I go bankrupt, does this debt get included with that? Will the OR let me keep the family car thats on HP? Without it, I have no transport to and from work and my Wife will have no transport for the kids either.

I have completed a SOA if it helps anyone. I'm at the end of ability to cope with this now, everything is suffering in my personal life - I'm on edge all the time, I'm not interacting well with others including my wife and kids.

Hi StoBob

I'm sorry to hear about your predicament and it's easy to understand why you've been increasingly looking at bankruptcy.

Technically, the council are correct in saying that they could take a much larger amount from your monthly salary - the regulations allow them to take £343.40 of the first £2,020 plus 50% of anything over that. Is the salary figure given above what you receive before or after the current deduction?

Be aware that if you were to go bankrupt, you may well be asked to make contributions from your disposable income for up to three years. This is known as an Income Payment Agreement - you can learn more about it and bankruptcy here.

Charity/grant assistance with bankruptcy costs is likely to be very hard to source unless you have particular circumstances to plead e.g. health problems or vulnerability of some sort. It may be worth contacting www.turn2us.org.uk to check whether there are any organisations who can help you with this.

Do please also make sure that you get some advice from one of the free organisations directly if you're seriously considering bankruptcy. As I'm sure you are only too well aware, it's a big step.

All the best

Dennis
@natdebtline

CIS

They have said that I have no right of appeal and it is entirely at their discretion how much they take, they are entitled to take up to roughly £815 a month from me if they wanted to.

They are correct on the first point, there's no appeal other than to the council. On the second point there may be an issue - they can control what they take but only down to the level of whether they want to issue one attachment order or two (only 1 order can be issued per liability order, maximum of two in total). They have no legal powers to vary the amount each order takes, the relevant %'s are set in legislation and the council cannot vary these rates.

StoBoB

CIS wrote: »

They are correct on the first point, there's no appeal other than to the council. On the second point there may be an issue - they can control what they take but only down to the level of whether they want to issue one attachment order or two (only 1 order can be issued per liability order, maximum of two in total). They have no legal powers to vary the amount each order takes, the relevant %'s are set in legislation and the council cannot vary these rates.

You are right, they cannot vary the % but they can agree a fixed capped payment, which is what they did but for an amount they knew wasn't feasible - then upon moving house they now want the full £300 per month and expect me to find the extra £146 for my new council tax bill in another town.

CIS

You are right, they cannot vary the % but they can agree a fixed capped payment

Only if it's not being taken by attachment of earnings.

StoBoB

CIS wrote: »

Only if it's not being taken by attachment of earnings.

They agree a set amount then notify the employer of this, the employer then can agree to pay that to them. IT comes out of my pay, if my employer doesn't pay it (They'd love to help me) they get fined.

My local council is particularly nasty and the man that runs it gets very rude and hostile if you try and fight your case to them. They refuse to help and make things very difficult in regards to trying to clear your debt fairly

CIS

They agree a set amount then notify the employer of this, the employer then can agree to pay that to them. IT comes out of my pay, if my employer doesn't pay it (They'd love to help me) they get fined.

The council are acting outside their legal powers here - the council tax (administration & enforcement) regs 1992 (as amended) allow the council to issue an attachment of earnings order (regulation 37 onwards) and specifically states that it will be taken at a % . Effectively the attachment order couldn't be enforced against the employer if they didn't pay as it's not being implemented correctly.