Council Tax and house repossession help!

[jane.l]

I have just found this on a council tax exemption information website:



Property left empty by a bankrupt person
An unoccupied property where the person who would be liable for Council Tax has been made bankrupt is exempt. The property does not have to be unfurnished to qualify for this exemption.


So there may be some hope there, after all, I will ring the Council Tax office first thing tomorrow and then the OR’s office if required to find out where I stand with this bill.

[MelanieGiles]

That's a great bit of news Jane, and does appear to release you from the liability. Do let us know how you get on with the calls to the Council and the OR's office.

[chris.g]

We told the council we were going br and they automatically exempted the house. We only phoned for advice and they were very helpful. The exemption is upto June/July so I'm assuming that they give this time to allow the OR to sort things out.
Good luck Jane

[worriedgirl]

Hi there I work as a housing and council tax benefit administrator for my local council. I am not 100% but I am sure you should be able to get the class c exemption because the property was empty and unfurnished even if it hadn't been repossessed. I can find out for definately tomorrow and get back to you!


Anybody on here work in a council department and know anything about this situation?????: I posted it on my other forum but have had no replies and I am worried sick

Briefly, we left our house in April 2007 and moved to a rented house. Not paid mortgage or secured loan since January 2007. Northern Rock got a Possession Order on 1 August 2007 and we were ordered to leave the house by 29 August 2007 (but we had already left months earlier) We declared bankruptcy at end August 2007 as I wrongly believed the house had been repossessed In fact it was not until 13 March 2008 that NRock actually changed the locks on the house

In about May last year, I rang the Council Tax and they said we could have a Class C exemption for 6 months as we had left the house for repossession. I have just got a letter this morning saying that they can only award a Class L exemption (for repossessed properties) from the actual date of enforcement which was 13 March 2008, it says they have enclosed an amended bill, BUT THERE WAS NOTHING IN THE ENVELOPE

I am now really worried that they will say we are liable for this extra Council tax, (from August 2007-March 2008)because NRock buggared about for so long and did not actually repossess the house until much later Should the Council Tax Dept not award another Class C exemption for 6 months or are we only “allowed” one???

We have no money to pay this, why do crappy letters like this always arrive at weekends when I cannot ring them up???

Am I likely to be liable for this council tax and if I am, would they be likely to accept £5 per month, 'cos that is really all we could afford, I am so worried now


[/quote]

[chris.g]

Thanks very much, that's great worriedgirl,
xx

[wen]

Just found this thread... when I spoke to my council after I sent the keys back, they said that due to the BR we would be exempt, and only had to pay council tax at our new property from the date of Bankruptcy.

Getting them to update the accounts with the new financial year though is not so easy or quick!!

[jane.l]

Well, I am back, not good news. [:(] Apparently, a property can only have the Class C exemption for 6 months ONCE only

I have rung the Council Tax ( who were not sure about bankruptcy and spoke to the Recovery Officer) I then rang the OR and unfortunately, I am liable for this debt! It is because Nrock have taken 13 months to repossess the house, we only got the Class C for the first 6 months. This is a word of warning to you folk going bankrupt, the OR has not taken any interest in our house and just left it to be repossessed because it had serious negative equity so he wasn’t interested in it. You just have to hope that your bank repossesses the house within the 6 months whilst the Class C is applicable, any longer and will be liable for council tax again as we are.

As Nrock have taken so long to repossess it, technically, for the last 6 months, WE were the owners so we have to pay this bill

It is hundreds of pounds, I have applied to the Council Tax to pay £10 per month, not sure if they will accept that amount though, I have to wait and see!

Think I am going to cry.

[chris.g]

Oh Jane, I'm so sorry it's turned out like this for you. I'm just hoping that as we have handed ours back we won't be liable. I think I will be getting in touch with the Halifax AND the OR just to make sure....

[jane.l]

Yes, keep us updated. I wonder if just handing the keys back would mean you are in a better position, but I guess not, because you are still technically the owner! What a scary situation! I got advice from CAB before bankruptcy and this was never mentioned, they advised us to leave the house for repo too [:(]
They must not have seen this situation arising.

[ianmillington]

Hi Jane

On his appointment as trustee all your estate vests in the OR "without any assignment, conveyance or transfer". (S306 Insolvency Act 1986). As a consequence he became the legal owner of the property. The OR could have disclaimed it, in my view.

Tell that to the local authority.

Ian

[chris.g]

Oh dear me....the plot thickens.....
I've emailed my OR and I'm waiting for a reply so I decided to contact Halifax Mortgage Advice to see what their take on it is. Seems as if the branch I handed the keys into hasn't notified them!!! No keys, no forms, nothing, nearly a month on!! They seemed quite kerfuffled when I told them I had a signed receipt for the keys from the branch. They then asked me if I could go to the branch and asked them what they had done with the keys. I requested that THEY contact the branch themselves as when we had tried to hand the keys in they didn't have a clue!!! God knows what's happened to the keys, I'm just so pleased we've got that receipt!!!!

[ianmillington]

Never underestimate the value of a piece of paper!

Ian

[jane.l]

Thats awful[:0]

I am even more confused than ever now, my OR office is telling me this is a AFTER-bankruptcy debt but surely, as I was bankrupt in the period they are charging for, and the house already had a Possesion Order on it, I have been told the OR is responsible?

What if the situation was different, say, the house had 20k equity in it and it was left empty and the owner had gone bankrupt? What would happen in that instance regarding council tax, who pays it, the OR or the bankruptee??

Why must my bankruptcy be fraught with all this hassle? There is no end to it all[:(]

[ianmillington]

Jane - it's because you would seem to have an examiner who doesn't know Insolvency Law, or at least what the Trustees rights and obligations are.

When the OR was appointed Trustee he became the legal owner. You were no longer the owner, nor were you the occupier. How on earth can you be responsible for post-bankruptcy council tax on a property you have already left and where you have lost all control over what happens to it?

If there had been equity in the property you can bet your life that the OR would have claimed ownership rights then. Even under a negative equity scenario had you wanted to stay there after the bankruptcy you would have had to buy out the ORs interest (albeit for £1 plus legal costs). That says the OR is the owner. Alternatively, the OR has a power to disclaim that interest as onerous property under Section 315 Insolvency Act 1986.

I hope this helps.

Ian

[zoe]

Sorry i have only just seen this post!
You have been advised correctly jane - a class L exemption is only awarded from the date of reposession. Any Class C is for 6 months only and then liable for long term empty property charges (which most councils actually charge full whack for)
The best bet is to contact the OR