In rather desperate need of advice

[withoutfundsandscared]

Hi and, first of all, apologies for name change but am trying to protect my professional persona as far as possible.

Oh the shame of being poor...

Anyway, we are in mega-debt. I am seeing the CAB tomorrow to sort out the comparitavely minor (in some respects) debts and will probably seriously consider bankruptcy as the only option - we will see. However, we have Council Tax arrears galore about which very stupidly we have been largely (although not completely) been burying our heads in sand.

It is at the bailiff stage for non-payment on three different properties and is into the several thousands.

It is entirely unfortunate and complex personal circumstances that has led to this situation and we have no way of paying. We are vacating our property this month as we cannot afford the rent. We have not a penny to spare in reality.

I have phoned the courts and the council and have been advised that there is no option but to pay. I suggested a token offer which I really could not afford but even this would be declined as it would amount to about £1 per week. Even this, we cannot truly afford.

If we go for bankruptcy on other debts then there is a possibility that I might free up £200 per month that could be paid to the Councils in question but we would not be able to pay for subsequent council tax if this offer was made.

What I really badly need to know is, will they (not can they because I know they have the ability) take me to prison?

I have 3 young children and I am so very worried.

I am self employed and my partner incapacitated.

If we were declared bankrupt there is only our washing machine and old video plus my wedding ring that is worth anything. I think I can keep the computer because I use it for work.

I also have a car which I haven't yet paid for in full - my mum keeps up repayments on this and has done for a year.

The have been advised to hide my car for now.

I need my car to carry out my work. I use public transport a lot but there are occasions when this is not possible so my work would become far less viable without it. Will I have to give it up? Obviously this is a lesser worry than prison but i am concerned that means to work will be removed and our situation will worsen.

Can I transfer ownership to my mother legally to avoid losing my car?

I am such a mess over this and normally hold things together pretty well.

Any help or advice would be truly appreciated.

TIA

God poor you.Have you been in touch with the Consumer Credit Coubselling Service/
tHEY ARE HUGELY HELPFUL AND MAY BE ABLE TO ANSWER YOUR QUESTIONS IF NO ONE CAN ON HERE[THO I AM SURE THEY WILL].They also take a breakdown of what you have coming in monthly and what your outgoings are and then after that if there is anything left it can be shared amongst creditors.Or they might advise bankruptcy.
Wish i could be helpful but i am sure someone will be along soon

Council Tax debts will be folded into any bankruptcy.

If you are paying your car off on HP they cannot take it, as this would be forcing you to break your contract with the car HP company which even a court can't and won't try to make you do.

If it came to it, they wouldn't take your washing machine, or your wedding ring, don't forget to raise any money from the property they seize from you, it has to be worth something second hand, IYSWIM? They might get £50 for a second hand washer, but it wouldn't be worth it to them, it costs money to send the baliffs in and paperwork etc.

You may find (if memory serves me right) that because your concil tax was due in full in April 06, and the councils so ver kindly let us pay it monthly, the whole year we spend in debt to them, so if you were to go for bankruptcy the whole yearly ammount would be wiped with the bankruptcy debts. I don't know where you will stand with the other properties, if you have any equity in them, they may be reposessed, but CAB will be able to give much more info on that.

Sorry you are going through this, and I hope you get some good news tomorrow

Sorry for what you are going through, we have a few small depts amounting to £2000 which Dh realy worries about.

I would of thought if you put the car in your mum's name they can't take it. Also if you have any money put it into your mums account.

Sorry im not much help.

withoutfundsandscared I feel for you. We went through bancruptcy before we got in as deep as you did and felt bad enough then. So can only imagine how awful you must feel.

As for the car, if you have to go the bancruptcy route you can apply to have your car excempt which probably will be accepted as you said you need it for work and also you have 3 small children. Depends on how much your car is worth though. Ours was 5.5k when we bought it and a Rover and the Official Receiver would probably only have gotten 1k or so for it so it got exempt.

Good luck tomorrow at the CAB

Even if you go into bankrupcy, you MUST pay up your council tax arrears under terms they find acceptable.

Sorry, but a pensioner just went to jail for non-payment of council tax.

Even if you are on benefits, you must work w/the Council - thru a solicitor or the court system, to find terms that are acceptable by which to pay back the tax.

You can and will be sent to jail for failure to pay council tax, kids or no.

This should be your TOP priority whilst visiting the CAB.

The car doesn't belong to you - it belongs to whoever your lender is.

hi we thought we were going to have to declare bankrupcy this time last year but managed to get an IVA instead which meant we could keep our house and DH could keep a car for work transport. IT may be worth looking into to see it it will help. Transfering ownership will depend on the bankrupcy..if you do it now then it wont be counted but if you do it while processing bankrupcy they will expect to see some sort of profit from it to pay back towards creditors.
Good luck with CAB as our IVA has made things a hell of a lot easier for us.

Oh hang on, expat. It's a bit strong to say that she "can and will be sent to jail". A person can only be imprisoned for non-payment of council tax if they can show wilful refusal or culpable neglect. This covers people such as Ms. Rooney as she had the money but was wilfully refusing to pay. Culpable neglect may cover situations where you gave priority to other, less immediate debts, or ran up credit card debts for non-necessaries rather than paying the tax.

The courts usually only use imprisonment as a last resort because, if you serve your sentence, although the arrears remain outstanding, the council has no further means of enforcement. So it's not really in their interest to do this.

Thanks so much for the replies.

Although our possessions, few that we have of any value, are our lesser priority it is a comfort to know that things that make our lives okay to cope with such as the car and washing machine will likely stay in our posession.

It saddens me to think (pathetic I know) that the washing machine my mother bought for me to make life easier, might get swallowed up by this debt.

I figured that imprisonment might happen and hence I am terrified. It is freaking ridiculous though as it achieves nothing except more cost to tax payers in terms of accomodating me in prison and my children with social services potentially.

How long might I go to prison for? If I have no residual income when my income and outgoings are established along with the value of my saleable belongings (if there are any) what will happen next?

Would they accept a tiny, tiny offer per month or would they just cart me off to prison regardless? [deadlyserious question]

withoutfundsandscared... I have no experience with the prison side of things but I'm sure what freckles says must surely be right! If not then something's wrong with the system...

It's a bit strong to say that she "can and will be sent to jail".

How is it strong, Freckle? The terms she put forth to payback the debt were unacceptable to the council, so they've sent the bailiffs round.

That's serious enough to where the top priority needs to be working w/CAB, and hopefully a solicitor, to reach an agreement w/the council regarding the tax arrears which will also allow her to pay current tax.

Ever watch 'Bailiffs'? There's at least one person in every series who goes to jail - often for only a short period - for non-payment of council tax OR for breeching the payment agreement they made w/the council re: tax and business rates.

It does happen.

Of course it's in no one's interest, that's why the council will try to reach an agreement, but 'burying one's head in the sand' and arrears from three different properties send a message that a person may or may not view arrears as a priority to pay back.

That's why it's SO important to work w/someone at CAB on the arrears first.

The council WILL work w/you, w/o funds, they do it all the time, even w/people on full benefits.

But they must agree to the terms in writing or they'll keep making your life hell - adding fines for having to use bailiffs, etc.

PLEASE approach them, either yourself or thru the CAB!

Just been doing a bit of research into the prison side of things and looks as though the sentence would be short or even suspended IF it came to this.

To be honest, I'd happily (well, ykwim) go if it meant the worry gone. What do they do about the remaining arrears once you have been to prison and you still don't have funds to pay?

Don't feel in a position to get on my high horse about this really but it drives me nuts to think that I'd be banged up without a hope of keeping my business and only source of income going so that things might be better in future.

I am going to see about an IVA and bankruptcy and see if this helps free up money so that an acceptable offer can be made to the council.

If you're claiming benefits, they may deduct it from your payouts.

But really, since no one knows the extent of your arrears, get some proper legal advice from the CAB. They are used to this sort of thing and can liase between you and the council to reach some sort of repayment agreement.

have you spoke to the national debt helpline, also I keep hearing about how there is government legislation that can clear up 90% of debts (or is that bankrupcy) not really sure. Wish I could offer more advice, i have been in a big financial mess some years ago so I can sort of understand how you feel

My DH and I went through a horrible experience with close to £60,000 worth of debt, we went to the CAB, and it looked like we would have no choice but to go bankrupt, the man at the CAB did assure us that all coucil tax arrears would be cleared as part of a bankruptcy. As it turned out a rise in the value of our house meant we had enough equity to squeeze through on an IVA maybe this would be an alternative for you?

Also if you think that bankruptcy is the only way, don't forget it will actually cost you money to do it.

Anyway good luck.

expat, I know the CAB are the only people who can properly advise but I felt that to go prepared would be useful and also help with getting through until 2pm tomorrow as I am a wreck right now.

Our total debts are around £50 000 and council tax debts are probably about £8000 but would need to check what bailiff fees had been added to date for a precise figure.

I don't claim social security benefits but dp claims incapacity and I receive working and child tax credit. We woudl be even more in the shit if we lost any of that money as we'd be homeless, etc.

I am sorry to hear that so many other mumsnetters have been through similar.

hi there. i was declared bamkrupt last june, so if you want any info please email me jolly _ holly 22 @ hotmail . com.

Good luck, funds! Hope it gets worked out. The sooner you face it head on w/the CAB, the better.

I had a bankrupcy in the US, but over there it was no big deal at all.

I didn't bury my head, though, and it felt better once I'd sat down w/someone and really worked out a plan of action.

Expat, I only meant that saying she can and will go to jail was a bit strong as that makes it sound inevitable and unavoidable. There are other options and it is by no means certain that the council will take the imprisonment option.

'Expat, I only meant that saying she can and will go to jail was a bit strong as that makes it sound inevitable and unavoidable. There are other options and it is by no means certain that the council will take the imprisonment option. '

And if you'd read my post you'll know I mentioned that coming to an agreement w/the council should be a priority.

Otherwise, it will look to them as refusal to pay and they will act accordingly.

They tend to only mete out prison sentences for those who refuse to pay. Normally they will set an agreement up based on what can be afforded.

IF after that, payment still isnt forthcoming, or they choose not to do the above, a prison sentence is between 2-4 weeks with the opportunity of parole immediately upon payment of the debt.

Thanks once again for all the advice it was a huge help and upport to me getting through yesterday.

I have been to CAB today and been advised that bankruptcy might not be the best option but to offer a very small amount ot each creditor is the thing to do.

The same goes for the Council Tax and other priority debts.

The advice was really useful but I do have a few questions that have occurred to me since:

How does one go about getting debts 'written off' or reduced and how long until this will be considered?

I was told that my car cannot be taken if I have paid more than 1/3 - I have - is this correct?

What happens if you decide on bankruptcy or you are forced to go bankrupt by creditors and you are not living in the country but are still UK resident (our plan, all above board and we will be informing creditors) because of work? What I mean is how do they keep tabs on you!?

Think that's all I am wondering/worrying about right now!

Thanks again.

Withoutfunds, my heart absolutely goes out to you because I have been in a similar situation myself and I know just how frightening and stressful it is.

I think if you are earning money, you can go for IVA (if in England or Wales) or a Protected Trust Deed (Scotland. This is better than bankruptcy as the consequences are less far reaching. Basically you pay off a set amount each month to creditors over a period of three years and then the IVA/Trust Deed is written off. I have a PTD myself.

Happy to chat about this if you want - I won't judge as I know how it feels.

Thinking of you all.

Can't say mush..but the court will never send you to prison over this, so don't worry about that!
You would have to be proven to have funds and be unwilling to pay, and also not that, but be unwilling to set up an arrangement to repay (it can be as little as 50p per week) before they send you to prison

My o.h used to work in the court admin system so learnt a lot, and more closely a friends of ours was in a similar position to you, and after getting the c.a.b. to do a statement of affairs, and testifying in court she ended up paying back £5 per week, and got her mortgage repayments (and interest) suspended for a year