Having problems with tax credits after I have been made bankrupt...please help!

Kerry511

Ok sorry, but this might take a bit of explaining so try bear with me :-)

I incurred two over payments from tax credits for working tax credit and child tax credit for the years 2011-2012 of £15,000. Since I was made aware of the overpayment (end of 2012) I stopped claiming and started to pay back monthly installments of £40.00
Since then I have made 48 monthly installments of £40.00 plus the odd extra (when I could afford it) Last payment was made to them in July 2016. The balance now is £12,500.
This is where it all gets confusing........... I called tax credit overpayments and advised them that I was canceling the direct debit as I was applying for bankruptcy and was advised to do so, they seemed fine with this and told me to call back when I actually had a bankruptcy order. Just to add I started claiming tax credits again in October 2015 due to financial difficulties and low income....award still live now!
Back to the bit where I was informing tax credits of the bankruptcy........ well I called them when I submitted my application as I was receiving letters from them stating I needed to contact them urgently (so I did).... Told them I am waiting to hear back, called again a few days later and explained I am now bankrupt and letters would be sent to them from OR etc........
Next thing I know my tax credits has been reduced by 50% each week to pay back 2011-2012 tax credit overpayments!!! So I call back and try explain numerous times but "the phone cuts off conviently for them" on several occasions! So frustrating as it's so hard to explain. :-(
I keep calling and get told I need to send in proof and they will reinstate my full entitlement....... "ok" I say "not a problem" they gave the address where to send it and so I did...... I paid extra so they had to sign for the letter at their end!

I called back 10 days after sending the letter as still not heard from them and they are still taking 50% of my weekly tax credits.

Tax credit adviser tells me they have not received anything and I told her I had proof they did (signed for 10 days ago) she said she was not familiar with bankruptcy cases and didn't want to give me wrong advise!!!!!!! So asked me to call back in a few days as they might be able to tell me more.

I wasn't happy with this so I called the tax credit overpayment department and I spoke to a lovely guy and explained everything (he promised he was not going to hang up on me :-) like all the others keep doing) He went On to tell me that "I can't quite believe this but they have closed down you 2011-2012 overpayments on your single claim and opened a new debt and added it into your current joint claim" I didn't understand what he was saying to me........... he then said the money I owed for 2011-2012 is now an overpayment on my 2015-2016 award!!!!!! So on his system it is showing I have a £12,500 overpayment for 2015-2016. He said the date the new debt was added was after my bankruptcy date and their for could not be written off!!!!!......Hope your still following :-) Made bankrupt on 7/11/16 and new debt added 14/11/16
He gave me some advice and said you need to act now what they have done is wrong and crafty in my eyes..... he said to go to my MP and complain as the old overpayments should have been written off not made into a new debt! He said he has never seen this before but action is needed now!

He transferred my call back to tax credits to try to ask them to reduce the amount they are taking off me until we sort this out but the adviser "hung up on my AGAIN"

I tried to call the NICE guy back but could not get hold of him!.... So I called tax credits and told them I know what they have tried to do and it's criminal as the debt was from previous years and they moved it to my current year (after bankruptcy date so I still had to pay it) this lady was very sympathetic and spoke to her manager. She said her manager is escalating it as a formal complaint as they should not be taking none of my weekly tax credits and someone will call me back within 5 days to discuss the situation! Don't really feel like I can trust anything that any of them are telling me! I have sent letters "they don't get them" ...I call they hang up as my call is to difficult for them and there is no email for them!! So how to I go further??

I am so lost and fed up! I don't know what to do or say when they call! And that's if they really call!

Can they do this/is it legal.........is the debt still written off in my bankruptcy?? Regardless of there messing around with dates etc? Is this not fraud ??

I spoke to the OR and he said it will sort its self out once they receive the bankruptcy order! I told him I already sent them a copy of both mine and hubbys but he didn't seem to bothered that I am living in poverty in the meantime and it's very stressful.
Plus I don't want them to use a loophole to trap me, so the sooner I sort this out the better! :mad:

Thanks guys

NotEvanAPot

I'm a little cross eyed from reading through, but main advice for now would be to condense above in to a timeline without the "they said so I said" detail. Dates, numbers and written statements etc. Much easier to dissect the pertinent information then.

There is no fraud against you, only public sector bureaucracy and possibly some errors. You cannot be defrauded of something that is paid to you by such a government department.

You must also understand that what the call handlers have access on screen to is both potentially limited and prejudicial in your eyes, however factual it may be. With a history of large overpayments and bankruptcy and the prevalence of claimant fraud, they are most certainly proceeding with caution.

Kerry511

Sorry reading back I can see I rambled on....... will try and do what you have suggested! Thank you :-)

Kerry511

Hope this might be a tad easier to understand:


*overpayment from a single tax credits award from 2011-2012

*single claim stopped after I received a letter of the overpayment and I started monthly repayments towards the overpayment of £40.00 pm. Continued to make payments for 48 months

*started a new joint claim October 2015 with my husband (award still currently active) up until now my previous overpayment had no affect on my current award.

*Made last payment towards to overpayment in July 2016 as I was filing for bankruptcy (called them and told them about this)

*went bankrupt on 7/11/16 official receiver said no ipa and no meeting of creditors (all creditors would get 0)

*on 10/11/16 I noticed my current weekly tax credits had reduced by 50%

*started getting letters from tax credits requesting I reinstate my direct debit. Called them and sent over my bankruptcy order (for me and hubby)

*letter was received by them and signed for (I have proof of this) signed for 21/11/16 but they say they never got it and have hung the phone up on me numerous times

*called tax credits and was made aware that my previous overpayments have been closed for 2011-2012 and a new debt was added to my current 2015-2016 award for my previous overpayments for £12,500. They said this was done on the 4/11/16 and that's now why they are taking repayments out of my weekly money.

*They advised as the old overpayment is now a new debt, that it cannot be included in my bankruptcy

*Called tax credits again and informed them I cannot afford for them to be taking this much money and the overpayment is included in my bankruptcy but they were not interested.

*called again on the 28/11/16 and adviser said she will raise it as a complaint and someone will call me back within 5 days

Just wondered is any of this normal and what I can do about it all! I am not sure of my rights and if what they are doing is allowed (should all creditors not get an equal share as they are now taking £120pm and all other creditors are getting 0) Any advice would be greatly appreciated

Thank you

NotEvanAPot

From the above, it's difficult advice to follow but give it a few weeks to sort itself. The OR will get involved if they are claimed a BR debt incorrectly, and them signing for a recorded delivery means nothing, letters take ages to be scanned let alone correctly uploaded and updated records.

Revisit in a couple of weeks if nothing moved on.

The 4/11/16 is pre-BR, so you already have this on a recorded call, they have lost but do not yet understand how.

TechwinWhittock

Hi ya,

Don't quite understand this....any time I was accused of 'overpaying'...which happens a lot as HMRC are such dimwits- they continue to pay something, and by themselves will deduct a monthly amount on the same claim...
I was overpayed by about £8k.....which the greedy banks took, so I was advised to put all that debt along with everything else in my BR form
HMRC still tried to chase for the money, and only stopped with letters from my OR AND my local MP....they really are incompetent jobsworths
Good luck!

DigForVictory

HMRC are run by humans. Things go wrong.


That said, copy the simplified version to your MP if they have not figured up from down by the end of next week!

All the best.

Kerry511

Thank you guys :-)

I have today sent an email to citizens advice and left another voicemail with the official receiver. Hopefully time is all that is needed but in the mean time I cannot afford to live without the money they have started to take.

It's frustrating as all different advisers give different advice and opinions. So everytime I need to call again I get told something else.
I totally understand they are human but it Frustrates me when they hang up or end the call and I have to start again....or they tell me they don't know! :-(

Also there is so many different departments and none of them seem to know who I need to be calling..... I just end up back with the tax credit helpline, which has very basic info..

Will pop back if I hear anything. I will write to the MP after I have spoke with the offiacial receiver and citizens advice.....

Thanks again I really appreciate all the advice.

Kerry511

Hi guys

Just wanted to update and see what you thought of this......

I spoke to the official receiver today and explained what was happening with tax credit and the overpayment. He advised me that he couldn't do anything and I had to liaise with hmrc myself as in his eyes the insolvency service has taken no further action against me and no IPA. He said to ask them to send me proof of where the rules state that they are allowed to do this.

I also asked him what I should do with the council tax money that I am left with, as I ain't paying it till April now. He said to keep it, to replace what hmrc are now taking off me!
Which will help with finances whilst we getting this sorted. :-)

So I suppose I will just wait for the complaints team to contact me from hmrc for now x

CIS

*Called tax credits again and informed them I cannot afford for them to be taking this much money and the overpayment is included in my bankruptcy but they were not interested.

It comes down to a technical argument as to when the notices advising of the overpayment were issued and the monies became due - if the notices came after the bankruptcy order was made (even if the money was due before that date) it was not a provable debt for the bankruptcy. The argument is over what point the final determination was made on the claim which held the original debt.

Kerry511

They notified me about the overpayments in 2012 and I have been paying them back since then! I only stopped the direct debit repayments to them once I went bankrupt in this November! That's when they moved the overpayments to my current claim and started taking the repayments through my current weekly tax credits........

Then claimed they have written off the overpayments from 2011-2012 and opened up a new debt on 4/11/16 and added it to my current claim. That's why they are allowed to take it out my current payments

Above is what they say they have done and why.