Paying Council Tax arrears while applying for an IVA

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by sam389 » Tue Mar 06, 2018 11:12 am
I’m in the process of setting up an IVA mainly due to negative equity on 2 properties which I rent out. The organisation I’m dealing with have put in place a plan to sell the properties and set up an IVA. There are several other debts included in the IVA relating to the properties like ground rent, service charges, utilities, and crucially, council tax.
I’ve been advised not to pay the council tax debt as it forms part of the IVA proposal. However, the creditors meeting was delayed by a couple of weeks and in the meantime I got a court summons (due in court today) I’ve been advised not to pay and am being told that the IVA once approved will override the liability order. However I’m worried that a) the meeting may result in need for extra time or modifications and in the meantime bailiff action goes ahead, or worse still that even if the IVA is approved the bailiff action will go ahead (as I have read on here has happened with Bankruptcy).
The council have been good when I have called them but can’t seem to offer a guarantee that no further action will be taken. They have said that any further action after a liability order usually takes 3-4 weeks.
The crazy thing is I have the money to pay the council and could pay tomorrow, but the company I’m dealing with setting up the IVA are saying that this would endanger the IVA. The funds have been committed to the IVA proposal, although I’ve even said I could just get a friend to pay the council tax. That’s fine for them but they aren’t the ones with the prospect of bailiffs knocking on their door.
I am finding this very stressful and I’d like some advice if possible.
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by Foggy » Tue Mar 06, 2018 1:03 pm
Paying the CT would be seen as favouring one creditor over another, which the IVA is designed to avoid, although it does sound as though things are being made overley complicated. Your IP could have taken steps to have a stay on proceedings agreed in court ... but that horse has bolted now.
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by luluj » Tue Mar 06, 2018 8:17 pm
Your Council debt should be included in your iva - as foggy says you would be showing preferential treatment of one creditor over another.
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