- I am in big arrears with my council tax. I want to fix it, but the council are now asking for my previous addresses, which I cannot give them for fear of involving people who in the past have given me somewhere to live. How do I resolve this?
- I assume they want your previous address to establish if you also owe them Council Tax from those addresses. I also assume that you are concerned that the people you have been staying with may have been claiming the single occupant or other discount.
Whether or not your staying there disqualifies them from claiming the discount will depend on the rules regarding residence - in brief a single occupant discount is dependent on a person's residency - the two are interwined. See section 6 onwards of the Local Government Finance Act 1992. A 25% Single Person discount can only be awarded where the property is the 'sole or main residence' of one person or there are more one occupier and the other occupiers are all disregarded for Council Tax purposes. Whether a person is resident in a property is not definitively defined in legislation has been clarified in case law.
From the context of your question I assume that these previous addresses were, at the time of your stay, however brief, your main residence and therefore your friends would be likely to be disqualified. One thing is clear - lying to the Council in this matter is a criminal offence. My advice is that you speak to your CAB or other local advice centre as a matter of urgency. I also assume that if you have big Council Tax arrears you have other financial problems. The CAB or other local advice centre will also be able to help you develop a payment plan to help repay your Council Tax arrears and other financial problems.
- Can the rental of a street market stall from a council (long term) be classed as an asset? It's an individual souvenir stall in West End. Can it be taken from me in a bankruptcy hearing?
- This potentially could be an asset if it has any value – which may be intangible such as the goodwill attached to the pitch if it is well established. If you are considering declaring yourself bankrupt, it would be very wise to get a specialist business valuer to take a look at the terms of the lease to determine whether there is indeed value to be attributed to the lease – and also whether the lease terminates upon the making of a bankruptcy order, which is generally quite common.
- I have a debt manager and am being charged an admin fee each month. Is this a normal procedure or should they not be charging for this?
- All fee charging Debt Management Companies charge a monthly management or administration fee of some sort. This should have been clearly explained when you set up the Debt Management Plan (DMP). There has been considerable publicity on this on 28 September covered by Debt Management Today. Several ‘not for profit’ organisations offer DMPs where there is no monthly management fee and they are funded through an alternative method called ‘fair share’ where your creditors pay the equivalent of a debt collection commission (generally 12% to 12.5% of your monthly contribution to the respective creditor), though 100% of the payment you make is taken off the outstanding balance and marked as such on the credit agreement on your credit file. Monthly administration fees can vary dramatically, but as a rule of thumb they range from a minimum of £20 to an upper ceiling of £100 per month. Some are based upon a percentage of your disposable income (the amount you pay to the Debt Manager each month), which may range from 15% to 19%. Others fees are tiered based upon the number of creditors you have for the Debt Manager to administer. The latter model is slightly more logical as it is based upon the amount of work they do – the more creditors you have the more correspondence and negotiation is required. Some providers cap the total number of payments you make and/or the total fees payable, after which all your disposable income is disbursed to your creditors. The fee structure should be in the Debt Management Agreement that you signed.
- I am currently on a debt management plan but am about to be made redundant. I want to offer my creditors full and final settlements with my redundancy money. Should I get my debt management company to do this for me or make the offers to my creditors myself?
- Your debt management company should be licensed to provide debt adjustment services as well as debt counseling on a commercial basis. They should be experienced in negotiating full & final settlements with some or all of your creditors, but they are likely to charge a fee for doing this – normally a percentage of the debt reduction they achieve. For example: You still owe £5,000 on one debt and they negotiate the full & final settlement to £2,500. They would probably want a fee of approximately 10% of the reduction – in this instance £250. You would therefore pay £2,750 in total to get the debt satisfied. Creditors will generally want to know where you are obtaining the funds from. The advantage of using an experienced negotiator is that they will have extensive experience with all the major creditors, debt buyers and debt collection agencies with regard to their likely acceptance policy based upon the history of your Debt Management Plan (DMP). Offers can vary dramatically, as some the debt buyers may have only paid a few pence in the pound for your debt and to them an apparent low offer may look attractive. Conversely some of the major lenders have policies of not discounting settlement offers by more than 25% and in some instance 5% or not at all. What you pay for is their expertise and that is the consideration you need to make.
- Having read the story on bailiff activity, I thought the credit industry had taken steps forward with the debt advice sector in laying down guidance to deal with people with mental health disorders who are in debt. Do those using bailiff services not have a duty of care to treat vulnerable debtors fairly?
- It is important that the debt advice, creditor and credit services sector collaborate together to treat vulnerable people fairly where they have unmanageable debts and a mental health condition. The MALG 'Good Practice Mental Health Awareness Guidelines' and the Debt & Mental Health Evidence Form have been produced to facilitate work with those with mental health conditions and are downloadable here. It is advised that these documents are used where there are cases of individuals whose mental health condition is such that they are unable to manage their financial affairs.
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