Bailiffs and bankruptcy become common currency of council tax

[EXC]

http://www.timesonline.co.uk/tol/new...cle5462336.ece


http://www.timesonline.co.uk/tol/new...cle5462649.ece

[enaid]

Re: Bailiffs and bankruptcy become common currency of council tax

January 7, 2009

Bailiffs and bankruptcy become common currency of council tax

Jill Sherman, Whitehall Editor and Kaya Burgess

Falling behind with council tax payments by only a few hundred pounds is increasingly tipping people towards bankruptcy as many town halls adopt a tougher approach to debts.
With council tax bills doubling since Labour came to power, more homeowners are struggling to meet monthly payments and are falling into debt.
Faced with a recession and budget squeezes, councils are increasingly using bailiffs and insolvency practitioners to get their money more quickly than by more conventional methods, The Times has learnt.
Such moves can push struggling families deeper into debt as they are forced to pay back arrears plus thousands of pounds in debt-collectors’ costs.


Once bankruptcy proceedings are initiated, people can face bills of up to £50,000 in insolvency and legal costs, even though their original debt might have been little over £750. Some are forced to sell their homes to meet the costs.
Town halls are under huge pressure to meet targets set by the Government and the Audit Commission to raise the proportion of council tax they collect.
Giles Hindle, an insolvency and corporate recovery partner with Beachcroft, the law firm, said: “What they have cottoned on to in recent years is that bankruptcy offers the most immediate prospect of recovering unpaid council tax.
“They have found it the most effective tool for recovery.” Last year councils collected 97 per cent of the £20.6 billion tax due, a rate that has risen steadily in the past few years.
Figures obtained under the Freedom of Information Act requests by the Liberal Democrats have exposed how aggressive some councils have become in chasing their debts.
Responses from 171 out of 370 councils show that 1,706 householders were the subject of bankruptcy proceedings last year for failing to pay council tax arrears.
Bailiffs were deployed to chase up payments in 600,000 homes by seizing goods if necessary — although they are not supposed to seize essential items such as cookers, fridges and beds. Watchdogs such as Citizens Advice also report a sharp increase in the number of people taken to court over council tax bills, with a 13 per cent rise in calls about arrears and court or bankruptcy proceedings in the past six months.
Peter Tutton, debt policy adviser for Citizens Advice, said that bankruptcy orders were used too often against vulnerable people for relatively small council tax debts.
“Even more people on low incomes are struggling to pay their council tax bills and some of the best councils are doing all they can to help when people are in difficulty,” Mr Tutton said. “But too many are still sending in bailiffs indiscriminately, without taking account of people’s individual circumstances.”
Earlier this year the Local Government Ombudsman found a council acted unfairly after being too aggressive in chasing arrears. Wolverhampton City Council made a resident bankrupt for failing to pay £1,105 in council tax but, after the official receiver was called in, he was faced with costs of £38,000. The ombudsman ruled that the council did not take adequate steps to inform him and that it should have chosen an alternative method to recoup the cash.
Some of the more aggressive debt-chasers last night defended their actions. Sandwell Metropolitan Borough Council, which filed for bankruptcy in 46 cases, claimed that it had a legal duty to chase arrears.
Steve Eling, Cabinet member for strategic resources at the council, said: “We’re an extremely deprived borough with an increasing level of unemployment at the moment.
“If people find themselves with bankruptcy petitions, it means they owe monies over several years. We take a hard line with those people — not doing so would be grossly unfair on those who do pay.”
In Brent, bailiffs have visited more than 13,000 households and brought bankruptcy procedings against 93 households. A council spokesman said that it had given almost 300 residents extensions to pay their bills.

How to get your money back . . . or not
— Initially, a town hall should send out several warnings and ask debtors to pay in instalments
— If debts are not paid, a court summons can be issued. A council can then seek a liability order, which allows deductions from earnings or benefits
— A charging order can be made if the arrears are more than £1,000. Cash can be recouped only when a home is sold
— Bailiffs can be sent in to seize household goods
— A bankruptcy order can be applied for as a quicker way of chasing debt and can be used if it is more than £750
— Once the court issues a bankruptcy order, the council can appoint insolvency practitioners
— They take over the debtors' assets and can force a sale of a house. Their costs, which have to be paid by the debtor, can amount to £50,000. Some debtors take out a loan to avoid selling their home

[Amy]

Re: Bailiffs and bankruptcy become common currency of council tax

Nice. Vote Labour.

[Celestine]

Re: Bailiffs and bankruptcy become common currency of council tax

PMSL @ Amy

Brighton is Con/Lib controlled and they sent the bailiffs to my sisters for paying her monthly CT 10 days late. The whole balance became due instantly.

Bloody councils.... :tinysmile_cry_t: hardly playing their community part in helping people in times of economic crisis....in fact they are tougher than the banks with meatier laws to aid collection. This is going to become a huge problem, especially since most councils lost millions in the Iceland Bank scandal........

[EXC]

Re: Bailiffs and bankruptcy become common currency of council tax

Problem is councils are under too much pressure from central government to meet targets.

[Amethyst]

Re: Bailiffs and bankruptcy become common currency of council tax

I agree it needs some reform on the council tax installments rights front.

The Council Tax (Administration and Enforcement) Regulations 1992

PART V


and Schedule I part I - The Council Tax (Administration and Enforcement) Regulations 1992

It has been considered previously, not sure if its under current consideration though.

3.6 Payment Instalments

The statutory scheme for monthly instalments is set out in Council Tax (admin& enforcement) Regulations, and prescribes 10 instalments are payable at monthly intervals if the demand is issued prior to April 30th.
There is legal provision to offer 12 monthly instalments, however, this would be by Special Arrangement and based on the payers’ particular circumstances. Any movement from the current 10 monthly instalment plan would affect:
a)the Council’s in year cashflow;
b)confidence over the in-year collection rate;
c)the Council’s administration costs

Therefore, any proposed change would have to be costed in order that the financial implications were reflected in the MTFF for 2007/08.

oh there was a thread somewhere where a bailiff company stated to enforce a distress warrant the bailiff did not need to be certified. so yes he does. Will look it up.

Certification of bailiffs
6. After regulation 45(6) there is inserted -

• " (6A) No distress under this regulation may be made other than by a person who is authorised to act as a bailiff by a general certificate granted under section 7 of the Law of Distress Amendment Act 1888.[4]"

[Amy]

Re: Bailiffs and bankruptcy become common currency of council tax

oh there was a thread somewhere where a bailiff company stated to enforce a distress warrant the bailiff did not need to be certified. so yes he does. Will look it up.

Wasn't that thread about TV Licence recovery?

[Amethyst]

Re: Bailiffs and bankruptcy become common currency of council tax

ahhhh yes it was...good job someone has a decent memory lol