Order for Sale - urgent help [CTAX debt]

[DevilD]

Hi there

 

I am new to the forum and need some help

my Husband (from whom I am separated) has run up Council Tax Debts - which I had no knowledge of.

The Council's solicitor has been odious and would not negotiate with me when I found out and contacted her,

neither would the Council

- I made 2 offers before she served the Order on us

- I had no idea she had even got the necessary paperwork together to get to this stage.

she applied for an Order for Sale and now we go to court on Friday, and I need some help on dealing with some points of law

- I was getting some free legal advice but the gentleman concerned is now overseas working on a Trial now.

 

the solicitor has finally accepted our offer (2 weeks after we made it and only 4 working days before we go to Court on this Friday

- obviously to further add to the stress we are already under) and will suspend the order for sale if we agree to some "extra" clauses she has added and which I need help with!

 

the offer she has accepted in order to suspend the order for sale is £1,000 now

with the remaining Council Tax being paid off over 18 months.

Please note the council tax is for 2 years 2010/2011 and 2011/2012 and the total debt including interest / bailiff fees etc is around £4250.

I have already paid off 2008/2009 and 2009/2010 for my ex. because he got in a mess.

Believe it or not we have maintained a good relationship even after this!

 

Do I contest these little extras in Court, or when I complain (to her firm / the Council)

about various matters/including the contents of the Agreement?

I am worried that if we contest them in Court then the Hearing will be delayed and she will say that we are trying to delay things / not pay

- which we are not and then add more to the costs she expects us to pay.

By the way she has already accused of trying to delay the process –which we have not!

In any event, these are her little extra:

 

 

If we break the agreement the property should be marketed at a sale price of not less than £150k.

This is not reasonable or equitable as the drive by valuation she obtained in June 2012 was for £165k

and we purchased the property 5 years ago for £182k and I put down a £18k deposit.

The only reason we have any sort of equity is because we have paid off a chunk of the mortgage (mortgage now stands at £135k)

but if she puts property on the market at this price we will be left with nothing.

Surely it is not reasonable for us to be expected to accept this?

Should we challenge in court?

• The property should be marketed at a value of no less than £150k - which is not equitable to us. Firstly as the solicitor obtained a drive by valuation of £165k in June 2012 and we paid £182k in 2005 with a deposit of £18k being paid. The mortgage now stands at £135k and the only reason we have any equity in the property is because we have paid off some of the mortgage. She would be happy to leave us with nothing (and probably further in debt), once the Mortgage and Council Tax Debt paid off - if for example a sale price of £145k was agreed this would leave us owing money for the conveyance / estate agents fees;
  
• Now this is the really good one and ties in with first "extra". She wants her Firm to conduct the sale of the property! Which is another little earner for her Firm (apart from her costs - which more on in a minute). Now surely this is a conflict of interest - ie she cannot work in the interest of both the Council and us? Hypothetically, she could put the property on the market, sell it to the Cousin twice removed of the head of XXX department at the Council's and leave us owing her Firm/the Estate Agents money for the sale, with the purchaser being left with a flat worth considerably more than was paid. Thus I presume we should challenge this in Court?
  
• 
  
• Next she has wacked on the Claimant’s costs (ie her fees) to the tune of £2,450. Now I/My ex appreciate there are some fees involved, however if she / the Council had met me half way and agreed a payment reschedule then a lot of the fees could have been avoided. It is my opinion she did not want to negotiate and wanted to earn extra fees/kudos for herself. Thus I presume we should challenge this in Court?
  
• 
  
• Finally the interest on the debt (around £500.00 to date) she wants continued to be added to the debt at a rate of £0.86 (8%) per day which adds £313.90 a year to debt. Surely this should be frozen at the date of the Hearing? Plus the interest rate is way above the rate of inflation and according to Section 17 of the Judgment Act should not be added to Council Tax arrears. As per below and again I presume we should challenge this in Court:
  

Section 17 of the Judgment Act, states

 

Every Judgment debt shall carry interest. However a Liability Order for council Tax should not be classed as a Judgment as defined in Section ( ) of the Same Act since it s not made in a Court of Equity or of Common Law.

 

The fact that there is a Charging Order does not affect this as a Charging Order for Council Tax does not meet the definition of a judgment either

 

Please HELP.

I know this is long winded but believe me when I say there has even more going on in the background!

I feel bullied, harassed and totally stressed and I will complain about this all post the court hearing

to the appropriate people but at the moment I need to know how to proceed.

 

I am not a bleeding heart and know my husband should have paid these costs but he was in a terrible state for a couple of years

and could not cope and then continued to bury his head in the sand, hoping it would all go away.

I also had cancer in 2008 and was diagnosed by my Oncologist in 2009 with Clinical Depression but neither the council nor their solicitors have taken care/note of this.

The last few years have been horrible and I just want to get things sorted but I don't want to be blackmailed in to agreeing her terms,

which are manifestly unfair to us.

Please note we will make the payment of £1,000 and put the monthly repayment aside

- if the court date is delayed because we do object to her terms, so she cannot throw this at us further.

Edited November 13, 2012 by DevilD
more detail to be added

[sequenci]

Hello there, welcome to CAG.

 

How much is the council tax debt for? I'm assuming that they already have a CCJ against you, when did they obtain this? How much is the property worth? Is there equity?

 

Best wishes,

 

Seq.

[DevilD]

Hi Seq and thanks for the welcome. I updated my post a bit messy but I am in in a panic. The debit is ffor £4250 including interest. Yes they have 2 Charging Orders obtained February 2011 and January 2012. Yes there is equity if the property is sold at a fair price ie the £165k quoted from the drive by valuation she got - not at the £150k sale price she quotes in the Court papers.

 

Tks

[sequenci]

Is the house owned in joint names, do you have children?

[DevilD]

Yes joint names, no children between us.

[DevilD]

I have been led to be believe it is highly unlikely the order would be granted and that it would be suspened as long as we keep to the terms of offer we made. However it is the extra the solicitor has added to the suspension of the roder that I find unpalatable and unfair and do not want to agree to.

[sequenci]

Hello again.

 

Orders for sale are indeed very rare as the court needs to consider many different factors when deciding on granting the order, and what's very clear is that in the grand scheme of things the debt is quite small compared to the property value. At the hearing you'll be able to challenge the 'extras', and one would hope a reasonable judge will be helpful. You should ask for a breakdown of their fees to be assessed for sure.

[DevilD]

Thank you so much Sequeunci. I have a breakdown to a certain extent although what the 40 odd letters she refers to sending means I have no idea! Also it is clear to me that she has added a huge amount of fees for preparing for the Order for Sale (which could have been avoided) and are again, I think, unfair. We also did think that the amount owing was small compared to the value - so it useful to know you also believe the same.

 

However we were worried that if we challenged the extras she will then not accept our offer (this is obviously what she is banking on) but I think you are right and the Judge would not think them reasonable either. I feel a lot calmer after reading your considered response! Thank you.

 

I won't bore you further but the solicitor has been utterly vile to me even though the debt is not mine ie she has accused me of lying, being unreliable like my ex has been, still living in the property in 2010 when I had left 2 years previously and of knowing about the debt when I did not thus making me liable.

[sequenci]

If you can show the court that you can clear the debt within a reasonable period of time they *should* grant an order that prohibits any further action whilst you stick to the arrangement. Do also remember that you can also ask the court to add conditions to the charge. It's not possible to guess the likely outcome but the courts should always ensure proportionaility in making their decisions.

 

I *think* the application for an order for sale to the court is £100. No idea how one would prepare for an order, 'oh shall I apply for an order for sale?' - that would take about 30 seconds! Not sure what else would be needed!

[DevilD]

Her fees for witness statement 1/2 are over £500.00!

[sequenci]

Where do you live? I'm wondering if there is a law centre near by that could help you.

[sequenci]

Her fees for witness statement 1/2 are over £500.00!

 

Ask the judge to asses the fees.

[sequenci]

Oh, and by the way, last year there were 81,092 charging orders made - and 406 orders for sale. Hope that gives you some hope

[DevilD]

Legal advice - yes I have been to Fulham Legal Advice Centre and had one of countries top civil barrister's advising me - which was great - but he is now away. I am trying to get in to FLAC today/Thursday to just touch base on these points but if not you have put my mind to rest. I will definately ask the judge to assess the fees.

[sequenci]

Was it these guys?

 

Hammersmith and Fulham Law Centre

Address:

142/144 King Street

London

W6 0QU

 

Telephone: 020 8741 4021

Fax: 020 8741 1450

Email: [email protected]

Website: http://www.hflaw.org.uk

 

If not they could be worth contacting. If you need to find an alternative law centre then the website is lawcentres.org.uk

[AndyOrch]

The legal situation is that non-payment of Council Tax is not a crime, or anything illegal. It is only a civil matter, and a Liability Order is not a criminal order, not would anyone in receipt of a Liability Order have a criminal record. It does not even amount to a County Court Judgement, and it is not recorded by Registry Trust, which is the Government body responsible for recording County Court Judgements. The only two licensed credit reference agencies - Experian and Equifax - have both confirmed the above, as have Registry Trust.

 

Not paying Council Tax is certainly not a criminal offence and the issue of a liability order at the Magistrates Court does not create a criminal record, nor even does it affect your credit rating, unlike County Court judgements, which do!

 

The remedies for recovery of unpaid Council Tax are:

 

Attachment of earnings or benefits

Distraint Order (seizure of goods to the value of the debt by bailiffs)

Insolvency proceedings (bankruptcy)

Putting a charge on the debtor’s property

Imprisonment.

 

Costs are incurred for the issue of the summons , more costs are incurred for the issue of the liability , more costs are incurred when bailiffs are involved (various), more costs are incurred if committal is sought or a charge is put onto the property or bankruptcy action is taken. These costs vary according to the action taken.

 

The liability order is not an order to pay. It is an order which gives the holder certain recovery tools, as have already been listed. It would be up to the Council to determine which tool to use, if that proves necessary. However, be aware that some tools are only available after taking other action, for example committal can only be requested after a Distraint Order has proved unsuccessful.

 

I have never heard of Statuary Interest being added to a Liability Order only the costs of executing the Order.Nor an Order for Sale ever being contemplated.

 

Regards

 

Andy

[DevilD]

Thanks Andy. The solicitor appears quiet malicious and seems to have taken against us. Also the Council Head of Special Recovery said to me when I was trying to negotiate terms - "we have used Order for Sales before and forced people to sell". Hum really not according to the figures from Seq! Further I do know (now that I have all the court papers etc) that this how it was progressed:

 

Liability Order

Bailiffs

Back to Council

Council to Solicitor

Solicitor obtained Charging Order

Solicitor did background checks for Order for Sale

Proceeded to Court to arrange Hearing for Order for Sale

 

No attachment of earnings was applied for - is that because the solicitors make more money proceeeing this way!

 

Also I can see there are costs from the bailifs/Stat. interest included in the £4250.00 and we did not rock the boat over £500.00 Statutory interest portion at this point but when I see she wants to continue to add Statutory Interest on I have to say enough is enough.

 

Also her fees at £2450.00 are around 65% of the basic amount owing of £3750.00 - which is outrageous and gives a total amount due of nearly £7,000 which is beyond belief! I cannot believe that the Council would not set a fee structure for such action with their solicitors beforehand and surely they must show a duty of care to the debtor in ensuring these costs (if recoverable from the debtor) are NOTexcessive and push people further into the quagmire of debt.

 

Plus when my ex feezed up to having an "issue" with the Council Tax at the end of August and I kept nagging him to contact the Bailifs - he finally did so at the beginning of October and it was then and only then that I found out about the charging orders and he, of course asked me to negotiate terms on his behalf. Whilst doing this the solicitor suddenly slapped the application for the Order for Sale in and we got served - underhand to say the very least.

 

Especially odd/underhand given that she had gathered all the information back in June to apply for an Order but just sat on it until I approached her in October - obviously she did not, at this point, want to negotiate for any number of reason, ie she either wants promotion/trying to make a name for herself/ more money for her firm or has a bug to bear with us (God knows why) or maybe she is just not a very nice person, who has forgotton that this is not a game, it is people's lives and we all make (really bad) fudges of things from time to time! Plus why is there no understanding shown of my position in all this?

 

It seems wrong to me that (whilst appreciating that my ex has been totally irresponsible) a person who does not own their property can be sent to prison (not nice - but some people just don't care) for a short period of time and his Council Tax slate will be wiped clean whereas a home owner can actually loose their home for the same thing.

 

Where is the justice in that?

[AndyOrch]

As Sequenci states you really need professional advice here and Im sure he will be along with further input.Just a few other points you may clarify was there any direction for payment by instalment within the LO?

What is the total liability Order amount ...forget her fees but include enforcement fees?

 

Can you post up the Judgment and CO orders? (less any identifiable data)

[Gaston Grimsdyke]

Well if it has to go to a hearing you might as well object to an OFS being made; it's a discretionary remedy so the judge might see it as disproportionate and could be persuaded to adjourn the application generally provided certain payments are made. As for the sale price, a driveby will be the open market valuation for a property sold by the vendor; it's a fact that repossessed properties sell for less, so a forced sale price against a driveby valuation of 150K is not crazy. As for who has conduct of the sale, it is completely normal for the creditor's solicitors to have that conduct, providing it is the council selling it as mortgagee in possession. If it's you selling then you can use who you like.

 

You will undoubtedly have to pay the legal costs of the proceedings. As a rule of thumb, if they were assessed by the court they would be about 65% of what is asked for. So on no account agree to what is being asked for, they will definitely settle for 65-70% of it. Ultimately it's up to the judge how much is awarded anyway. Don't get hung up on the relative value of the costs and the debt, though. Costs are driven by how much work is done, not the value of the underlying debt. The debt could be 1K or 100K and the costs would be the same.

 

The one point you definitely have got is on the interest. There is no provision whatsoever for interest to be charged on council tax debt. It is not a CCJ. Why don't you ask the solicitor exactly what provision entitles the council to debit interest - she will not be able to quote one.

[DevilD]

Thank you Gaston. This is very clear. I will definately object to the OFS being made because it is disproportionate to the actual debt and ask for it to be adjourned. I will also challenge the Stat. Interest and the costs.

 

Also I also understand what you are saying about the valuation and the solicitor handling the sale but think it is still worth mentioning that we object to these items too - as by this stage the solicitor will be so enraged that we have dared to challenge her at all that anything else we do challenge can't possible make her any more annoyed! Or do you think this would be pointless?

 

I am trying to get into get some free legal advice from the people who have advised me so far before Friday but it does not look good. However the information passed out here has been sterling and gives us hope.

 

Thank you all.

[DevilD]

Hi I need help again. My ex had arranged for Rundles to accept an offer of £50.00 per month to pay off this year's 2012/13 Council Tax and yes it is low but the Baillif was really helpful. We had to indicate this agreement in our witness statements for Friday's hearing because in the original papers that were served the solicitor said she was going to include this years arrears in the Order for Sale - as a "cummulative debt" which of course she could not because there was no charging order only a liability order.

 

Thus my legal advice guy wrote to her stating this. So it now appears clear to me that she has put her 10 penith worth in here and wants to get the debt sent back to the Council, who will then send it back to her to get a charging order, more fees etc. I have told my husband they cannot do this and he is speaking to Rundles now.

 

OK he has spoken to Rundles who are fine with his repayments and the chap said he has no idea what had happened and has reset the amount to £50.00. He said the Council can recall the debt if they are not happy with the repayment schedule at any time (he has no idea why a letter was sent from Rundles) my guess is the solicitors has spoken to the Council/Rundles, and got them to increase the amount they want to be paid back monthly and when he cannot pay this - it will go back to to Council.

 

So he is now expecting a letter from the Council saying they have recalled the debt etc etc etc and will pass to the solicitor for a charging order etc etc etc.

My ex now now wants to give in and accept her terms in Court on Friday for the OFS and I said that is exactly what she wants and we are being bullied.

 

I have told him that he has an arrangement and as long as he keeps paying this (unfortunately it will be reviewed in December - I think he should stick with what he is paying come hell or high water) then there is not much they can do. I have told him this is a separate liability order and if they try to get a charging order we can defend it by saying he is paying already and that there is no reason for them to take this further and that I do not believe the Courts will be happy with the Council's action.

 

If the debot goes back to the Council from Rundley then he should just keep paying the Council the £50.00 as they cannot refuse our money.

 

I am going to help him by paying the CT from next April 2013 so that is not an issue but the way things are being handled is frightening. Any thoughs on this? We are being bullied there is no doubt about that.

 

FYI once this Friday has passed I am intending to start complaint procedure with the solicitiors Firm about her behaviour. Also I am also going to complain to the Council and under the freedom of information act (which I presume I can do) I am going to ask how many people they took an OFS out again in the last couple of years for Council Tax debt. Then I am going to ask for the value of the debts and if I can prove that we have been treated unfairly ie only one other OSF served for a debt of say over £100k or 10 for over £20k etc then I think they will have to explain what the reason we have been treated in this way for such a small debt.

 

If I have to write to the CAB/our MP/whoever I will do as I really cannot believe the way he/we are being treated. He is near to breaking point and we are rowing which is of course exactly what the solicitor wants. I am now at the point of "bring it on" and feel that if we keep calm and don't panic we will be fine.