Avoiding bailiff fees by paying creditor direct.....Freedom of Information requests.

[Bailiff Advice]

The new bailiff regulations came into effect on 6th April and bailiff fees are strictly controlled and comprise of a Compliance Fee of £75 which is charged when the debt is passed by the creditor. If payment is not made or a payment agreement entered into during the ‘compliance stage’ a bailiff may attend the debtors premises and an Enforcement Fee of £235 is chargeable.

 

Significantly, the new regulations provide that from any payment made (whether to the bailiff, the magistrate court or the local authority) the Compliance Fee of £75 is deducted first with the balance being split on a ‘pro rata’ basis between the debt to the creditor and bailiff fees.

 

This novel approach means that unless the amount due (including bailiff fees) is paid in full, bailiff enforcement may continue and it is this point alone that has caused extreme difficulty to some ‘debt avoidance’ websites with associations to the Freeman on the Land (FmoTL) movement and 9 months after the regulations came into effect it is astonishing that debtors are continuing to be advised by such websites to avoid paying bailiff fees by paying the amount of the Liability Order or court fine only (minus bailiff fees).

 

Despite the regulations clearly outlining how payments are to be calculated, in May/June an individual made numerous Freedom of Information requests to Local Authorities seeking clarification as to how they deal with direct payments made to them after accounts have been passed to bailiffs. Since that time many more FOI requests have been made on the same subject and the up to date position is that approx a quarter of all local authorities have received requests on the same subject.

 

What has been the outcome of these Freedom of Information request?

 

Typically, in the very early stages (May and June) most responses made clear that the local authorities had very little idea as to how the new regulations would work in practice but since August/September the vast majority of responses confirm that they apportion the payment as outlined in the legislation and that they advise the bailiff company accordingly (or credit the bailiff company) with the payment.

 

PS: It is likely that there are far more FOI requests than outlined here. I have only referred to those that are available to view publicly on the FOI website: What do They Know.

[Bailiff Advice]

I should also mention a very worrying trend which is that in many cases, where the local authorities confirm that they apportion payments in accordance with the new regulations (deducting the Compliance Fee of £75 first and splitting the balance of the payment on a pro rata basis) the person making the FOI request then seeks an 'internal reviews' !!! [/color]

 

Madness.......

[Conniff]

But surely assignment does not cost anything. When the bailiff takes action on that assigned case, only then can a monetary claim be made ?

If you get a liability order on CT for instance, that does not mean a bailiff is entitled to any payment.

[Bailiff Advice]

 

If you get a liability order on CT for instance, that does not mean a bailiff is entitled to any payment.

 

Once the Liability Order has been passed to the bailiff company then under the new regulations, a Compliance Fee of £75 is added. Even if only a part payment is made towards the debt the £75 is a first charge and is to be deducted at source. This applies even if the debtor were to then pay the council direct.

[Conniff]

Am I right that it is 14 days before it's passed to the bailiff ?

[Conniff]

Once the Liability Order has been passed to the bailiff company then under the new regulations, a Compliance Fee of £75 is added. Even if only a part payment is made towards the debt the £75 is a first charge and is to be deducted at source. This applies even if the debtor were to then pay the council direct.

 

 

That says that bailiffs could receive the paperwork and just file it down and get £75 for doing absolutely nothing.

[Bailiff Advice]

Am I right that it is 14 days before it's passed to the bailiff ?

 

Another good question.

 

Before 6th April the regulations provided that once a Liability Order had been granted the local authority had to send a '14 day' letter to the debtor giving them a final opportunity to pay in order to avoid the debt being send to bailiffs. April 6th saw this provision revoked!!!

 

Now, as soon as a Liability Order is authorised the local authority can if they wish send the debt straight to the bailiffs. As soon as the debt is entered onto the bailiff companies computer system a Compliance Fee of £75 is applied. This fee is to cover all the enforcement companies administration costs including sending the Notice of Enforcement, setting up and administering a payment plan and monitoring the account and passing payments to the local authority etc.

 

It is vital that debtors 'engage' with the bailiff company during the 'compliance stage' to avoid a personal visit from the bailiff and if they cannot to pay the debt in full (which is normally always the case) to get a payment proposal set up. All bailiff companies are encouraged to accept sensible payment proposals that will see the debt (including bailiff fees) repaid over 3-6 months or possibly more.

[bazm]

A couple of things;

 

Many councils did set up their own '14 day LO letter' after 6th April. However, there is now a movement to remove this because it's introducing expensive and unnecessary delays to recovery.

 

Secondly, the £75 compliance fee is added to the debt as soon as its received by the EA and does not depend on a compliance letter being produced to trigger the fee.

[Conniff]

So it would seem as if legislation, (ie the government), has turned sternly against the consumer and the bailiff companies have carte blanche to operate how they wish.

That can't be fair.

[Bailiff Advice]

So it would seem as if legislation, (ie the government), has turned sternly against the consumer and the bailiff companies have carte blanche to operate how they wish.

That can't be fair.

 

To a certain extent you are right but what is very clear indeed is that since the new regulations came into effect 9 months ago more and more debtors are now 'engaging' with the enforcement company at the 'Compliance stage' (ie: the period of time outlined in the Notice of Enforcement) and setting up payment plans.

 

Yes....the debtor would have incurred a Compliance Fee of £75 but balance this against the summons and Liability Order costs etc charged by the local authorities when obtaining the Liability Order (typically between £95 and £150) then this figure of £75 is not too bad.

 

In fact, a most welcome outcome of the regs has been that the use of ANPR equipped vehicles around London has almost dried up. That is excellent news in itself.

[Bailiff Advice]

 

Many councils did set up their own '14 day LO letter' after 6th April. However, there is now a movement to remove this because it's introducing expensive and unnecessary delays to recovery.

 

 

I have not been comfortable with the removal of the '14 day' letter since first becoming aware of the revoking of the regulation and I am 100% certain that I am right in that the debtor must be made aware that the Liability Order has been authorised prior to the debt being passed to the enforcement company.

 

I am aware from other LA's of their plans to discontinue with sending letters and also aware that the reason is a financial one bought about by government cut backs but surely the administration cost (of sending a letter etc) should be included in the summons /liability order cost charged to debtors ??

[brassnecked]

To a certain extent you are right but what is very clear indeed is that since the new regulations came into effect 9 months ago more and more debtors are now 'engaging' with the enforcement company at the 'Compliance stage' (ie: the period of time outlined in the Notice of Enforcement) and setting up payment plans.

 

Yes....the debtor would have incurred a Compliance Fee of £75 but balance this against the summons and Liability Order costs etc charged by the local authorities when obtaining the Liability Order (typically between £95 and £150) then this figure of £75 is not too bad.

 

In fact, a most welcome outcome of the regs has been that the use of ANPR equipped vehicles around London has almost dried up. That is excellent news in itself.

Didn't the previous Labour government want to give the bailiffs power to use force against a debtor also when changes were first mooted also, so they could then lawfully use a foot in the door barge their way in and effectively lawfully assault a debtor?

 

At least the penalty is cash only even though £75 is more than the old two visit fees. it is still a big difference betweern £42.50, and £75 when you have nothing.

 

It does appear that they will creatively manage to apply both the £75 and engineer a visit for the £235 by being creative with the 7 Clear Days, from the letter that netts them £75

[outlawla]

......

I am aware from other LA's of their plans to discontinue with sending letters and also aware that the reason is a financial one bought about by government cut backs but surely the administration cost should be included in the summons /liability order cost charged to debtors ??

 

If that cost is specifically included in the summons / liability order cost recharged to debtors then it would (in theory) be breaking the law.

 

Ultimately the regulations only provide for "a sum of an amount equal to the costs reasonably incurred by the applicant in obtaining the order", however in practice, administration costs post liability order are included in the court costs along with the tea & biscuit and CEO's pension fund.

[Bailiff Advice]

I have not been comfortable with the removal of the '14 day' letter since first becoming aware of the revoking of the regulation and I am 100% certain that I am right in that the debtor must be made aware that the Liability Order has been authorised prior to the debt being passed to the enforcement company.

 

I am aware from other LA's of their plans to discontinue with sending letters and also aware that the reason is a financial one bought about by government cut backs but surely the administration cost should be included in the summons /liability order cost charged to debtors ??

 

Didn't the previous Labour government want to give the bailiffs power to use force against a debtor also when changes were first mooted also, so they could then lawfully use a foot in the door barge their way in and effectively lawfully assault a debtor?

 

At least the penalty is cash only even though £75 is more than the old two visit fees. it is still a big difference betweern £42.50, and £75 when you have nothing.

 

It does appear that they will creatively manage to apply both the £75 and engineer a visit for the £235 by being creative with the 7 Clear Days, from the letter that netts them £75

 

BN.

You joined the forum in 2009 so may not know too much of the 'history' . I joined in 2006 and around that time the Tribunal Courts & Enforcement Bill (as it was at that time called) was being debated and indeed the government were intent on wanting to give bailiffs the right to use force against the individual. A gentleman on this forum took it upon himself to start a petition to oppose this clause and he wrote to all MP's and government agencies and used this forum to persuade visitors to sign the petition. Just over a million visitors viewed the thread and we all have that person to thank for this provision finally being removed.

 

On the point of the £75 fee being more that the previous fee of £24.50 and £18.00. We have to remember that these fees had been set over 20 years ago. It is slightly complicated but before 6th April the fees 'belonged' to the local authority and that was the reason why they were kept at a low figure (given that local authorities should not profit from enforcement).

 

Your last point is the most important and very worryingly, only a few days ago we saw an example of a letter from Equita in relation to a liability order for a local authority that is run by Capita and where the letter only allowed '6 clear' days. This is completely at odds with the agreement reached with all CIVEA members to provide 14 days. The subject of 'Capita' has been a problem on the forum for a very long time......and appears to be continuing.

 

PS: Capita own the enforcement companies; Equita and Ross & Roberts.

[Conniff]

Yes....the debtor would have incurred a Compliance Fee of £75 but balance this against the summons and Liability Order costs etc charged by the local authorities when obtaining the Liability Order (typically between £95 and £150) then this figure of £75 is not too bad.

 

 

I understand that someone has to pay the collection charge and that someone should be the person who defaulted, but this still adds another £200 to a bill they can't afford to pay.

There has to be a better way of doing this than sending in a Viking with an axe.

[brassnecked]

If Capita was a City trader BA, it is likely that they or their directors could have a holiday in HMP wormwood Scrubs, for insider dealing, such is the nature of the Crapquita stitch up in councils infested with this appalling company with too many fingers in the public pie. What was nauseous was the fact that Capita and Equita arrogantly provided LAs with "Training" in the new regs, then ignore them with impunity, as you indicated with their creative use of clear days to ground the Enforcement fee.

 

I'm with Conniff regarding the plain the fact that adding debt to debt to collect it is counterproductive. as in making indebtedness last twice or three times as long. Some debtors will never discharge a debt with more and more fees being added.

 

I remember speaking to a bailiff around 2006 when I was assisting someone as a community councillor, and he was very smug as in he was saying that the law would soon allow him to push a debtor away, and cuff them if they tried to get "arsey" whilst he cleared the house. Thankfully as you say he didn't get that particular wish granted. There would have been a few shock horror bully bailiff stories in the press if the government had bone-headedly pushed it through regardless. Thankfully the sterling work by CAG and the petition did the trick and squished it.

Edited January 14, 2015 by brassnecked
put the "B" in bone

[Bailiff Advice]

I understand that someone has to pay the collection charge and that someone should be the person who defaulted, but this still adds another £200 to a bill they can't afford to pay.

 

There has to be a better way of doing this than sending in a Viking with an axe.

 

The last figures that I had for 2 years ago was that 3.3 million Liability Orders had been issued. With the dreadful changes introduced by IDS to the benefits system it is expected that this year, the figure will increase significantly and you only have to read the online SCOOP pages to see daily stories of yet another local authority cutting staff and slashing overheads.

 

I know that this suggestion may be unpopular for many but my 'personal view' is that a 'brave' government should have introduced more council tax bands a long time ago (and certainly long before the recession).

[Bailiff Advice]

The last figures that I had for 2 years ago was that 3.3 million Liability Orders had been issued. With the dreadful changes introduced by IDS to the benefits system it is expected that this year, the figure will increase significantly and you only have to read the online SCOOP pages to see daily stories of yet another local authority cutting staff and slashing overheads.

 

I know that this suggestion may be unpopular for many but my 'personal view' is that a 'brave' government should have introduced more council tax bands a long time ago (and certainly long before the recession).

 

The amount that everyone pays in council tax is based on the properties assumed capital value on 1st April 1991 and is then allocated into one of just eight bands coded by letters A to H. Introducing new bands for higher value properties is a 'no brainer' and should have been done long ago (and almost certainly before the term 'mansion tax' was invented. My own council tax would rise but at least that would be much fairer than the unfair system that we have at present.

[Conniff]

The last figures that I had for 2 years ago was that 3.3 million Liability Orders had been issued

 

 

At £100 that makes an income of £330million (Three hundred and thirty million) has been added onto council tax bills.

 

 

I can't agree that IDS' changes are dreadful, the whole benefits bill is dreadful and benefits were never ever intended to be an alternative income which a lot think is their right.

[Bailiff Advice]

At £100 that makes an income of £330million (Three hundred and thirty million) has been added onto council tax bills.

 

The 'true' revenue that local authorities generate from issuing Liability Orders is actually a lot more and could even be closer to half a billion pounds. This is because, in the past 3-4 years most councils have increased the amount they charge to debtors with many councils now charging between £125 and £150. Where there is serious concern is that with companies (small and large businesses) it is very common to see that local authorities charge summons 'costs' of around £250 plus (for doing the same work) !!!

 

Local Authorities rely upon this source of income and in the next couple of months it is generally accepted that all LA's will be forced to reduce the summons and liability order 'costs' in light of Reverend Paul Nicolson's forthcoming Judicial Revenue.

 

Worryingly for debtors the local authorities will be looking at ways to recoup this loss of income !!!!

[brassnecked]

In Wales we were victims of a rebanding exercise, we mainly lost out and the bands are ludicrous, with Band A as in the presumption of small stateter homes is still £44,000, mant bills doubled and now 10 years or so after the Rebanding some homes have a higher council tax payment than rent

 

Back in the day this was a news report:

 

http://www.telegraph.co.uk/finance/personalfinance/tax/4494260/Welsh-feel-impact-of-council-tax-rebanding.html