New IVA-council tax bombshell advice??

longtermplanner

DorisTrousers wrote: »

Fermi, unless the position at the DRO Unit has changed very recently, they accept that the ruling does apply to DRO's, but it is probably fair to say that they would prefer that it didn't. I have been made aware of an e mail directly from them in mid April that confirms their position. If that stance has changed on this issue since then I am happy to be proven wrong on this.

Interesting. The problem with applying the ruling to DROs is that it makes it almost impossible for a client to pass the 'less than £50 a month spare income' test, if they don't have to pay council tax for the next 6 months say.

DorisTrousers

longtermplanner wrote: »

Interesting. The problem with applying the ruling to DROs is that it makes it almost impossible for a client to pass the 'less than £50 a month spare income' test, if they don't have to pay council tax for the next 6 months say.

You would be surprised. Most people that apply for DRO's, which of course use the Common Financial Statement as a means of calculating affordability rather than any other guidelines that may be used for other debt solutions, have such a large negative disposable income that taking the Council tax allowance out of a financial statement makes not a jot of difference. I would argue the other way, in as much as approved intermediaries/competent authorities should be actively seeking to include the liability for the current year wherever possible, on the basis that a DRO is surely there to give a debtor as much relief/breathing space from unaffordable debts as possible.


UTMNII is normally very fair re IVA's, certainly for this forum, however I can't agree with the latest point re profiteering. I have looked at the post on the other forum, and the prevalent voice on there, herself an IP, confirms that it is common practice to include this years liability. No liability order is currently needed to do so, although prior to the High Court ruling that may have been the case. To copy another poster, in practice it works only where both partners are entering insolvency of some form or other, or where it is purely a single occupancy.


Seems to me that IP's hands are effectively tied on this matter, so blaming IP's for this rather misses the point, in my opinion anyway.


Politically, this may be rather an unexploded and ticking time bomb, allowing all forms of insolvency to include this years liability may lead to a shortfall in councils coffers, but the law as it stands since this ruling should be applied fairly to all and the political repercussions and fallout, if any, remain to be seen.

UpToMyNeckInIt

Cheers DT: I do not claim to be any sort of expert, just another IVA customer trying to keep on top of the latest developments.

I do concede that I am struggling to interpret all this, (I am in the situation where I am in the IVA, but my Wife is not, so would not have been discussed in my proposal), and I apologise if I have meted out an injustice to the IVA industry - particularly as it appears that the ruling means that IP's HAVE to apply this.

...Can I blame the lawyers instead?

Just how much is affect Council Budgets is debatable: Only a very small proportion of the UK population get made insolvent after all.

An interesting development nonetheless.

DorisTrousers

"...Can I blame the lawyers instead?"


ALWAYS blame the lawyers as a default position, unless proven otherwise. Works for me....