Council Tax liability order

Samirish

Good afternoon
I went BR in Feb 2020 and subsequently my attachment of Earnings for CT was stopped for the remainder of the financial year.  I received a letter from the district council saying they have submitted a claim to the OR for outstanding council tax for 1 April 2018 - 31 March 2019 and 01 April 2019 - 31 March 2020.  It then goes onto say that no further payments in respect of CT are due until 01 April 2020...great.  Not quite, I have received my new CT bill for 2020/21 and they have included a large amount from outstanding payments from a Liability Order!  This has almost doubled my monthly CT payments!  I rang the council and was told that a monies owed under a liability order are not included in BR!  I spoke to my OR who said the same thing!  This will put me right back into debt again as my budget is so tight anyway.  Just when I thought I'm getting on top of my finances, something comes along and sh1ts all over it again! 

CIS

A liability order balance is covered by a bankruptcy order providing the arrears fall in to the period covered - the fact that there is a liability order doesn't prevent it being a debt that can be included.

Look at it from another way - If the council were to make you bankrupt then they are required to have a liability order for the council tax - if it couldn't be included then they'd be unable to make you bankrupt !

The only way the amount pre bankruptcy could remain due is if it became due only after the bankruptcy - i.e. it was some kind of retrospective adjustment or it was due to fraudulent behaviour.

Samirish

Thank you for your reply. 
So would the remaining attachment of Earnings payments still be payable from the time I went BR to the 31 March? As those are arrears which fall outside the period of cover? 

This is so confusing, how do I deal with this when the Council insist they can (and will) take the money and my OR seems to agree?  Do I speak to another OR? 

mwarby

I don’t think you have the option of taking it to another OR. I would think the bankruptcy would take precedence over the attachment of earnings, but I’d also think the OR would know and act correctly 

mwarby

https://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch1-12/Chapter9/part9/Part%209.htm Says that an attachment of earnings order should be discharged on bankruptcy, but it also says that unless the attachment of earnings order is stopping an IPA or IPO it’s not the ORs problem to resolve. You could seek further advice from a solicitor or maybe CAB but I suspect the cost of that route would outweigh what you get back

Samirish

Ok, thank you. 
I think I need to talk to the Council and determine exactly what the additional amount is, all it says on my bill is 'previous years balance of £xxx is included in your instalment plan'...it also says 'previous years summons balance of £xxxx is subject to court proceedings' so God knows what that's going to throw up? 

CIS

Samirish said:

Ok, thank you. 
I think I need to talk to the Council and determine exactly what the additional amount is, all it says on my bill is 'previous years balance of £xxx is included in your instalment plan'...it also says 'previous years summons balance of £xxxx is subject to court proceedings' so God knows what that's going to throw up? 

Believe me, it can be be a nightmare. I've worked in dealing with council tax for nearly 2 decades and I still shake my head regularly at what councils try to do (although their errors etc do keep me in business !).

Minkym00

Your council tax debt vests in your bankruptcy, it really is as simple as that.

Go  back to your OR as what you have been told by them so far is wrong, and that is not acceptable. They need to help you get this sorted, saying that it’s not their problem is just not good enough. Keep pushing. 

mwarby

Minkym00 said:

Your council tax debt vests in your bankruptcy, it really is as simple as that.

Go  back to your OR as what you have been told by them so far is wrong, and that is not acceptable. They need to help you get this sorted, saying that it’s not their problem is just not good enough. Keep pushing. 

sadly though it looks like the OR is following the instructions of the technical manual, although it does rather depend on whether the OR thinks an IPA is on the cards

9.154

"The official receiver should normally only become involved in the discharge of an attachment of earnings order where such is necessary for the purposes of enabling the bankrupt to comply with an IPO/IPA.  Similarly, any application that post-bankruptcy payments to the creditor are reclaimed for the benefit of the bankruptcy estate should only be made in connection with an IPO/IPA, since the monies represent post-bankruptcy income (see paragraphs 31.7.42 to 31.7.143 for IPAs and paragraphs 31.7.152 to 31.7.153 for IPOs).  Otherwise, the bankrupt should seek his/her own legal advice as to whether an application to discharge the attachment or earnings order or reclaim post-bankruptcy monies taken by the creditor should be made. "

I think from ORs point of view that the costs and hassle of getting involved is not worth it in many cases, not great news for the OP, it's perhaps worth pushing the OR and council tax department, but I'm not sure the OR can be forced to assist

Samirish

Bit of an update... 
Spoke to my regular chap at the District Council (yes, we have had that many phone calls that we are now on a first name basis and he is on my Christmas card list!), explained that any any monies I owed before BR should be cleared and that yet another payment taken in March (AoE) should be returned.  He asked me to put it all in writing 🙄🙄 I sense diversion tactics 🤔 We shall see what happens.