Water debts in a DRO - interesting take from CAB

fatbelly

Where unmetered water rates are included in a DRO the bill for the full year will be a qualifying debt. Many water companies have a clause in their charges scheme which purports to allow them to send a new bill the day after the DRO (or bankruptcy order, or Individual Voluntary Arrangement) has been made.

Debt Experts have advised challenging this practice on the grounds that once a qualifying debt is included in a DRO the water company has no remedy in respect of the debt (s251G Insolvency Act 1986). If the water company wish to object to the full years bill being included they need to do so within 28 days of the order (s251K). This process is advised to creditors at the same time that they are advised their debt is included in a DRO.

We have also argued that a water company’s charges schemes cannot override the legislation - it is not possible for a firm to contract out of a statutory provision.

Coventry Law Centre were successful in winning this argument on behalf of their client at a hearing in Coventry County Court in October 2015. Severn Trent issued a county court claim against a client who refused to pay a new bill where their water rates for the year had been included in a DRO.

The Court held that Severn Trent Water cannot rebill a customer for the period commencing the day after a Debt Relief Order if the total outstanding debt was included on the Debt Relief Order and dismissed Severn Trent’s claim.

We understand that Severn Trent have said that following this case they are now objecting to the inclusion of the full year’s bill in all cases. The objection process must be followed correctly. If it is and the DRO Team decides that it might amend your client’s DRO, following a creditor's objection, it must send details of the objection and the grounds used by the creditor to your client. The client then has the opportunity to make comments about why the DRO should not be amended.

Your client will have 21 days within which to send comments to the DRO Team who must consider them before making a final decision.

If the DRO Team amends a DRO following a creditor's objection they must inform the client of this decision, your client then has the right to challenge the decision by applying to the court. The DRO Team has said that it will reconsider its decisions where a client gives reasons. The client should try to resolve the matter with the DRO Team before making an application to court.

Electrum

When does the 1 full year start and finish please?

If about half a years worth of unpaid water bills go into the DRO, does that mean you wont get a new water bills for another 6 months or so?

fatbelly

Electrum wrote: »

When does the 1 full year start and finish please?

If about half a years worth of unpaid water bills go into the DRO, does that mean you wont get a new water bills for another 6 months or so?

Yes, that's what the courts and the CAB believe is correct, provided that you are on an unmeasured basis, that is you don't have a water meter, the company have already billed you for the whole tax year, and you put that in the DRO.

They usually bill you afresh, starting on the day after the DRO and citing their insolvency clause. The county courts appear to believe that is unlawful, but it could be tested in a higher court at some stage.

I have today received my quarterly specialist mag with more details of the case - very interesting.

Electrum

Fatbelly I would really appreciate your help with this.

I am unmeasured basis, I had a water bill for the forward year about £600 or something, about six months into that I did a DRO, putting the figure in on my water bills, it was well over £600 with late charges etc.

After the DRO, I got a letter from the water company saying about £266 of the bill was included in the DRO and rest is still owing?????????????

So a few days after the DRO I get a massive water bill with threatening wording saying I owe hundreds of pounds again.

I thought it would be a little while before I owe them anything straight after my DRO?

fatbelly

Electrum wrote: »

Fatbelly I would really appreciate your help with this.

I am unmeasured basis, I had a water bill for the forward year about £600 or something, about six months into that I did a DRO, putting the figure in on my water bills, it was well over £600 with late charges etc.

After the DRO, I got a letter from the water company saying about £266 of the bill was included in the DRO and rest is still owing?????????????

So a few days after the DRO I get a massive water bill with threatening wording saying I owe hundreds of pounds again.

I thought it would be a little while before I owe them anything straight after my DRO?

Then your case mirrors the Coventry case exactly - no surprise, as all water companies behave like this.

There should be enough info in my first post for you to put it to them that your liability for the whole year is covered by the DRO unless they have successfully objected to that, through the DRO Unit.

Garethgrew

This is exactly my situation as well. The water company did not accept the last water bill in the dro, they only accepted a little of it, and immediately after dro they sent me the same bill with only a little taken off for the dro.

What's the best way to proceed please?

Garethgrew

I'm not getting anywhere with the water company,

My intermediatory who did my DRO says they will not help me, I have to do it myself.

Are there any other companies or organisation who can help me with my water company?

fermi

Who did your DRO?

fatbelly

I'm not pretending this is going to be easy. Water Companies hate losing money to insolvency.

Coventry Law Centre clearly got the bit between their teeth in challenging this, so if you live near a Law Centre, they would be a good bet.

http://www.lawcentres.org.uk/

Failing that the 'Debt Expert' team (the old Specialist Support) at CAB seem keen for battle, but you would have to find a local adviser who would refer to them for help.

It would come as no surprise if Stepchange/Payplan did not want to get involved