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    I have started looking at “OFFERING” bankruptcy to make people repay a HB overpayment and was wondering if others have tried it before.

    the scenario is this –

    1) recoverable op calculated.
    2) persons from whom it is recoverable refuse to pay.
    3) the above person(s) have either an overpayment greater than £3000.00 or a HB op PLUS council tax arrears greater than £3000.00.
    4) the person(s) own their home (either landlord or were previously tenants) which they would potentially lose if made bankrupt.

    Initially I intend to send letters advising them they could potentially be made bankrupt. If this fails to elicit a re-payment I am not sure –

    1) what legal process I would need to follow.
    2) how I could get the ctax arrears and HB overpayment “joined” to petition for the bankruptcy.
    3) anything else that I need to know.

    Naturally I will involve the Council’s legal services but advice from my follow practicioners would be a great help.

    Thanks in advance for all responses.


    I know you have to serve a statutory demand first, and then if no response to that you can issue a bankruptcy request without further notice.

    I am not sure how easy it is to get someone made bankrupt though, and I can’t be sure but believe it is quite complex, and do not think it has been done often at this authority and not foe Housing Benefit overpayments.

    Isn’t it a bit ironic that you could make someone bankrupt to repay a HB op, but if they are made bankrupt by someone else and your HB debt is not a fraud op, there is no ongoing entitlement, and it pre-dates the bankruptcy then you can pass it for write off!!!


    The law is also somewhat different in Scotland than in England and Wales. For one thing. in Scotland a stat demand has to be served by hand by a Sheriffs Officer, the levels of debt must be higher, there is much more protection for the debtor and so on. I agree it is very much a last resort and there are other powers to recover the debt by summary diligence that would need to be tried first. These would include arrestment in all its (five) forms.

    In England and Wales, the LA does not need to go near its Legal Dept for any of this; the system is designed for LA staff to deal with it themselves and is very effective. Unfortunately there is no central system in Scotland and no real alternative than to go via the Sheriffs.

    Carol Meredith

    Andrew, have you thought of putting a charge on the hom? That way if it were sold the authority would be able to recoup the overpayment before any equity was paid out. I know we have done this in one case.



    Thanks for the replies.

    Unfortunately putting a charge on the home (think it’s called an inibition order in Scotland) cost a bit and only last for 5 years, so our council tax collection team tend not to use it (unless they see the house for sale in the local paper!) so I will follow their lead.

    If all else fails we will give banruptcy a go and let you know how we get on.


    You need to be careful what you wish for. If the clt [i:16ada63ba2]agrees [/i:16ada63ba2]to bankruptcy, and depending on what other creditors come out of the woodwork, you might not end up with very much at all (if anything). Putting a charging order on is a much better option.

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