Bankrupt but trouble with creditors

chocdonuty

Help! I was made bankrupt on august 21st and everything seemed ok. I rang up one of my creditors to inform them that this had happened as their bailiffs had already been round and there was a payment due this monday so I just wanted to make sure they knew, anyway they told me that it doesn't matter that I am bankrupt and I still owe them money as it is a council tax debt and was subject to a liability order back in 2005 so IO I am still liable, I did ring the OR and they told me that my creditors were wrong so I rang them back and was told the same again, they would not call the OR to confirm or help in anyway. I tried to call back the OR but it they were closed. I am now really worried and wondered if this had happened to anyone before or knows anything about liability orders and bankruptcy, hope someone can help, michelle

rog2

Hi cd - The OR is correct. The 'creditor' - I assume it is probably a bailiff company who you talked to - is totally incorrect.
IF their 'bailiff' turns up for a 'payment' on Monday - just show him your court paper. If he persists with this 'storyline' ring the police.
His ONLY legal way of asking for payment now is via the OR.

JCS1

Sorry, but council tax debt is a grey area in bankruptcy (along with over payment of benefits), and the council can still pursue the debt if they decide to. But make contact with your OR's office and get them to send notification of your bankruptcy to your council and to the firm of bailiffs - this is often enough to make them stop for the time being.

http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch1-12/Chapter9/Part1/Part_1.htm#9.11

chocdonuty

Well after many phone calls (probably costing me a fortune:mad:) I have finally got hold of the OR again and she took about an hour to ring me back and explained that my creditors were right and I do still owe them money, it took her a while to get the right info as it is a difficult area of bankruptcy. Anyway someone advised me, actually my ex's new lady, they have their uses! to call the original council and get them to help me, they have now called off the bailiffs for a couple of weeks while they sort it out and although I have to pay it back, going through the council is a better option as they will try to reduced the payments for me and go through them rather than the bailiffs, so kind of sorted!

michelle

rog2

JCS1 wrote: »

Sorry, but council tax debt is a grey area in bankruptcy.

http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch1-12/Chapter9/Part1/Part_1.htm#9.11

Thank you for that JCS - I have certainly learnt something, there, but YET AGAIN there is an overriding message of inconsistency coming through here. I was certainly under the impression that Bankruptcy would overrule a Liability Order.
Also, the actual quote from the OR manual, in the link you posted, could be interpreted in more ways than one.

wherediditallgo

I agree, rog - it is very muddy water, isn't it? Reading that page on the Insolvency site, I'd have taken it that the council can't recover the money if they've already taken steps to recover the debt, ie if they've already started proceedings they've got to allow that legal process to continue to its natural conclusion, rather than try to get goods from the debtor to service the debt that way. Even if a committal warrant had been obtained, the BR court could get that stayed pending further investigation/clarification of the situation. I therefore don't see how a council can still authorise a bailiff to come to the property. If they've got a liability order, surely they have to go back to the court to say that chocdonuty hasn't settled the debt & the court then decides the next step, rather than the council increase the debt by sending bailiffs who are going to charge for their services. I suspect that's why the council have called off the bailiffs for now - they'd have a hard time explaining to a court why they decided to increase the debt with bailiff charges knowing the OP was already BR.

chocdonuty, paying the council is definitely better than going through the bailiffs. However, make sure you get everything in writing so that the bailiffs & the council don't try to argue the toss with you two weeks from now.

debt_doctor

Hi all, sorry but I just dont agree with this. The only council tax that is still recoverable after bankruptcy ( should the council wish) is the current year where the council has neither obtained a liabillity order or served a final demand.

Now as you say the arrears are for 2005 under a liabillity order they are a provable debt in bankruptcy.


Where steps have already been taken by the local authority to recover a debt by insolvency proceedings or another method open to them (e.g. by attachment of earnings (see paragraph 9.125) or a charging order (see Part 4)), distress may not be levied

The council has already taken steps to enforce the debt by instructing bailiffs pre bankruptcy

I beleive your OR is wrong.

debt_doctor

Hi all, sorry but I just dont agree with this. The only council tax that is still recoverable after bankruptcy ( should the council wish) is the current year where the council has neither obtained a liabillity order or served a final demand.

Now as you say the arrears are for 2005 under a liabillity order they are a provable debt in bankruptcy.

I beleive your OR is wrong.

betterlatethannever

Can i just jump into this thread then and ask a question?
I have an attachement of earnings for last years council tax. I was told on this forum that, that would be included in my BR (went br on 14/08) I informed the local council that i was bR and sent a copy of my BR order to them, yet, once again, they have taken money straight from my wages. Can i reclaim this? and how do i stop them doing it again next month?

debt_doctor

Hi all, sorry but I just dont agree with this. The only council tax that is still recoverable after bankruptcy ( should the council wish) is the current year where the council has neither obtained a liabillity order or served a final demand.

Now as you say the arrears are for 2005 under a liabillity order they are a provable debt in bankruptcy.

I beleive your OR is wrong.

EllieB_2

I think DebtDr is right. If the council have obtained a liability order which they would have to do before setting an attachment to wages then they have called in the debt which means it is provable in bankruptcy and the Attachment to Earnings Order should have been suspended. I would write to the council asking for a refund of monies paid since the Order and if they refuse, complain to the Local Government Ombudsman and also let the Official Receiver know.