Council Tax and Bancrupcy

[nfoo6135]

Hi All

I'm writing on behalf of my mother. I currently know she is in a LOT of debt! She has recently had to go to court due to a unpaid council tax bill of £10k!

They have taken proof of her earnings and have left her with bare minimum a month. To the point she is even struggling to put food on the table or pay other bills i.e TV licence.

She's currently going through a form of depression as has just been made redundant! She's also taking out payday loans now and getting herself in even more trouble and I'm worried for her health.

She currently rents a house at £600 a month and wasn't even earning £1200 a month when all the debt started to build up!

I suppose my questions are:

Why did the council allow her to get into so much debt - knowing she couldn't afford to pay it?
If she declared herself bankcrupt, could they clear the debt?
Or will she end up having to go to prison?

ANY advice would be appreciated!

[meellis]

Re: Council Tax and Bancrupcy

I am sure people better than me will be along soon but just remember that being in debt is not a criminal offence so she won't end up in prison for being in debt. With your support though she does need to deal with it so I feel you need to be a lot more hands on and discover the real depth of the problem. Bankruptcy can be an answer for some but there are alternatives and all lines should be investigated.

[Wombats]

Re: Council Tax and Bancrupcy

Hi All

I'm writing on behalf of my mother. I currently know she is in a LOT of debt! She has recently had to go to court due to a unpaid council tax bill of £10k!

They have taken proof of her earnings and have left her with bare minimum a month. To the point she is even struggling to put food on the table or pay other bills i.e TV licence.

She's currently going through a form of depression as has just been made redundant! She's also taking out payday loans now and getting herself in even more trouble and I'm worried for her health.

She currently rents a house at £600 a month and wasn't even earning £1200 a month when all the debt started to build up!

I suppose my questions are:

Why did the council allow her to get into so much debt - knowing she couldn't afford to pay it?
If she declared herself bankcrupt, could they clear the debt?
Or will she end up having to go to prison?

ANY advice would be appreciated!

Following the highly significant case of David Kaye v South Oxfordshire District Council & Certain Exhibitions Ltd in the High Court earlier this year, all CT arrears AND the entire CT for 2014 - 2015 could be put down as a debt. People only go to prison for CT debt if they are willfully refusing to pay, rather than can't afford to pay.

As to why the council let her get into so much debt, without knowing the circumstances it is impossible to say. They may well argue your mother has had every chance to pay.

As mentioned, debt is not a crime, nor anything to be ashamed of. However, you must try to stop your mother applying for payday loans. If she does decide to go BK, she will do herself no favours at all by applying for these now.

[nfoo6135]

Re: Council Tax and Bancrupcy

Hi - Thank you for your reply, it's reassuring! Do you think she may need to get back in touch with the courts that took her proof of earnings and ask for it to be reduced! I try telling her as much as I can but she will do it in secret because she's ashamed!

[Wombats]

Re: Council Tax and Bancrupcy

I think you need to get in touch with CAB, National Debtline or one of the other FREE consumer help charities. They have more qualified advisors who will be able to look at your mother's circumstances and advise accordingly.

If she isn't under her GP for depression get her down the doctors asap as this would help her cause. I appreciate you can't force her to stop applying for Payday loans, but try explaining that it will only lead to further misery and will exacerbate things if she is advised to go BK.