HERE COME THE BAILIFFS
In his latest post, Hugh Neal of
Arthur Pewty's Maggot Sandwich reported that Bexley Council has started using bailiffs to recover unpaid council tax. Not only has Bexley Council started doing this but, according to the Child Poverty Action Group (CPAG), is actually the council
more likely to do this than any other London borough.
Before instructing bailiffs, the council must first obtain a liability order from the magistrates court. Now given that once they have obtained a liability order, they can then instruct your employer to make a deduction from your wages or, if you are on benefit, they can ask the DWP to make a deduction from your benefit, one has to wonder why they feel the need to instruct bailiffs in the first place. All this does is delay any payment they receive and, because of additional cost you will have incurred, make it less likely they will get their money.
Using bailiffs is a process that can get them into a whole world of trouble if they are not very careful and, given the history of Bexley Council, being careful is not something they have shown themselves to be very good at.
I would like to tell you a story about what happens when councils let their debt recovery get out of hand.
Some years ago and for a number of years, I worked as a specialist money advisor for the Citizens Advice Bureau (CAB) and while it was doing this I encountered a number of problems with the bailiffs being used by Greenwich Council.
Basically, they were completely out of control; it could best be described as being like something out of the Wild West. Bailiffs, acting under the direct instructions of the council were using bullying, threatening and, in many cases, completely illegal practices to recover money.
In a number of cases that I was dealing with, bailiffs were threatening debtors with visits from the Police (illegal), threats to break into homes (illegal) and even resorting to threats of physical violence (definitely illegal). What made it even worse is that they would often not pass money collected on to the council in order to reduce the debt but would pocket the money themselves and claim it was "costs" or "expenses", the majority of which were also illegal.
All of this was going on with the full knowledge of Greenwich Councillors and the staff working in the council offices. I know this for a fact as a large amount of evidence confirming this had been made known to the relevant people on Greenwich Council by the CAB, Greenwich Money Advice Service, Greenwich Housing Rights, The Housing Aid Centre, Greenwich Law Centre and other advisory services in Greenwich, in letters, phone calls and face-to-face meetings over a number of years. No attempt was ever made by Greenwich Council to investigate these claims or to bring their agents into check or control their activities.
One particular case I was dealing with highlights possibly the worst example of the kind of thing Greenwich Council were getting up to.
My client, we will call her Mrs Smith (not her real name) was an elderly lady, living in a small house in Abbey Wood. She first contacted us for help after finding herself with council tax arrears, in addition, she also had unpaid fuel bills and a couple of credit debts. As she was also disabled, I had arranged to interview her in her own home, as we did from time to time with particularly vulnerable people.
She had never been in debt before but after her Husband had died some years earlier, she was finding it more and more difficult to cope. The small pension she was receiving was not enough to cover her living expenses and had applied for income support. She was certainly entitled to receive this, I had done a benefit calculation for her and established that she was entitled to a small but significant amount of money. I was surprised then when she showed me a letter from the DSS saying that she was not entitled to anything. After some investigation, I discovered that the DSS had miscalculated the amount she was entitled to.
For those of you who have never experienced the welfare benefit system I will need to explain a few things at this point.
Please note that the benefits and levels of entitlement I am about to describe were relevant at the time. Since then, there have been a number of changes to the benefit system and what I am describing below might not apply to a claim being made today. I will direct you to where you can get up-to-date information about befit entitlements later.
The way it works is this - Parliament (that is the government) decides how much a person needs to live on, added to this are various premiums according to their personal circumstances. There are additional amounts if you have a partner, have children, if you are disabled, are elderly, etc.
When I checked the calculation done by the DSS for Mrs Smith, I discovered that they had left off one of these premiums. At the time there were two levels of disability premium, a standard rate and a severe disability premium for someone in receipt of the higher level of Disability Living Allowance. Mrs Smith was entitled to this premium but the DSS had left it out out of their calculation. When I contacted the DSS to ask why they had done this, I was informed that this happened all the time. Apparently, there was a fault in the computer system that did the benefit calculations and it meant that this premium was always ignored even if the claimant was entitled to it. I was also told that they would correct it if anyone complained.
The obvious problem with this of course is that most claimants, especially frail, elderly and confused claimants would reasonably expect that the DSS would be doing their jobs properly and assume that if they got a letter saying they were not entitled to anything then that was actually the case.
Enter Greenwich Council. At the same time Mrs Smith applied for income support, she also applied for council tax benefit. When the DSS informed the council that she wasn't entitled to income support, instead of calculating how much council tax benefit she would be entitled to even without income support, they just cancelled her claim and told her she wasn't entitled to anything.
What we now have is a combination of wilful neglect by the DSS combined with the incompetence of the local council resulting in Mrs Smith having to pay her full council tax liability. Not being able to do this, she soon got into arrears and the council, despite being pretty much wholly responsible for the situation decided that the heavy handed approach was the way to go.
Enter the bailiffs. By the time I became involved in the case, Mrs Smith had a couple of years council tax arrears plus court costs, plus (and this is where it gets really nasty) hundreds of pounds of illegal expenses added to her bill by the crooks that Greenwich Council had hired as their enforcers.
One strategy they would use is to phone her and say that they were coming with the Police and if she didn't pay them some money they would have her arrested.
This is a criminal offence.
Senior members of Greenwich Council knew this was happening and had been given examples of this type of behaviour by all of the agencies I have described above. At no time did any of them intervene to stop it.
Senior members of the debt recovery department knew this was happening and at no time did anything to stop it.
The next thing that would happen is that the bailiff, having bullied their way into her house would then demand she pay them. In many cases Greenwich Council would never see this money, it would go straight into the pocket of the bailiff.
This is a criminal offence.
Senior members of Greenwich Council knew this was happening and had been given examples of this type of behaviour by all of the agencies I have described above. At no time did any of them intervene to stop it.
Senior members of the debt recovery department knew this was happening and at no time did anything to stop it.
Mrs Smith, having been terrorised into giving the crook acting for Greenwich Council all the money she had then couldn't pay any of her other bills and so was getting into arrears with them as well.
I made a number of attempts to get Greenwich Council to deal with the matter properly. It was their error or rather neglect, that had caused this problem in the first place. They should have re-assessed Mrs Smith's claim and, having done so, realised that they owed her council tax benefit to cover her liability.
They were having none of it, insisting I had to speak to the criminal gang they had hired to collect money for them. They, of course were in no mood to lose the cash cow that was Mrs Smith and refused to negotiate. One of them even phoned her and told her that she shouldn't listen to the CAB as it would get her into even more trouble.
Sorting out Mrs Smith's DSS benefit claim and her claim for arrears of council tax to be sorted out was going to take time, meanwhile, she was being bombarded with ever more threatening demands for money and I needed to do something quickly.
Enter a really useful device called a composition order. A county court composition order is similar in some ways to bankruptcy although less formal and is used for smaller debts. If you are in a situation where you are unlikely to be able to repay a debt in a reasonable time, you can ask to court to make a composition order. What will happen is that you will list all of your creditors and how much you owe them, you also provide a financial statement showing you income and normal expenses excluding any debt repayments you may already be making. You then offer whatever is the difference between your income and outgoings to your creditors on a pro-rata basis and ask for it to be time limited. This is usually three years. After this time, the debt will be deemed to be satisfied and the creditor cannot pursue you for any other payments. They are also not permitted to ask for payments outside the amount agreed on the court order.
Obtaining the order was relatively simple, a county court judge is always going to by sympathetic to an elderly disabled applicant, especially given the circumstances under which the debt arose in the first place.
Mrs Smith told Greenwich Council that she had obtained a composition order and that the council tax debt was on it.
You remember the bit I said about the creditor could not demand any other payment once the composition order had been made. Well, Greenwich Council debt recovery were having none of that. deciding that being informed of the order by Mrs Smith wasn't an actual official notice, they contacted their enforcers and told them what had happened and to get round to her house and get as much off her as they could before they got the official notification from the court. I know this because someone in the department had a conscience and phoned me to let me know what was happening.
The point of me telling you all this is to point out that unless properly monitored, debt collection agencies can and will often resort to illegal methods to recover debts for clients and add spurious and illegal charges in order to make more money for themselves. Often this will result in the creditor not getting all the money they are entitled to as the debtor has given it all to the debt collector.
I have no evidence that Greenwich Council uses or allows these methods today, if I'm wrong, perhaps someone will let me know.
One has to hope that Bexley Council has measures in place to ensure the agents acting on their behalf collecting unpaid council tax are acting legally. I am interested in any examples of where this is not the case.
Some advice on council tax.
Pay your council tax. It is a legal requirement and is one of what debt advice agencies call a "priority debt". To explain, anyone you owe money to can take legal action against you if you fail to pay. Some creditors have other sanctions they can impose as well. For example, it you don't pay gas or electricity bills, the supplier can disconnect you. Failing to pay rent or mortgage can result in you losing your home. All taxes and duties are what are called statutory debts and you are committing a criminal offence that could result in your being sent to prison if you refuse or wilfully neglect to pay them. Court fines come under this category as well.
All of the above are priority debts and need to be dealt with before anything else. That's not to say other debts aren't important as well, it's just that they're not
as important.
If you are getting into debt, don't just ignore it, it isn't going to go away by itself. The best thing to do is get advice. Bexley Citizens Advice can be found
here, where you will find links to their website plus details of their phone lines and office opening hours. The National Debtline also provides advice and they can be found
here.
The important thing is to deal with it before you are taken to court as this will only increase you debt burden as costs and penalties are likely to be added to the original liability.
Citizens Advice provides a very useful leaflet on how to deal with council tax arrears and can be found
here.
If you have problems with bailiffs at the moment, you should be aware of the following:-
A bailiff is not permitted to force entry into a residential property except in certain circumstances which are unlikely to apply to a council tax liability order. If you have previously allowed a bailiff to enter your property and they have seized but not removed goods, they have the right to come and remove them by forcing entry but only with a court order.
Anything the bailiff has seized has to be named. I have seen letters pushed through peoples letter boxes with the words "all goods" written on the list of goods seized. This is completely meaningless, especially, as in most cases, they haven't even obtained access to your home.
Bailiffs will often use peoples ignorance of the rules to imply they can break into your home. I have seen letters from bailiffs stating that "we hope you will be in when we arrive". What they don't explain is that is because if you are not in, they have to go away again.
Bailiffs, and other debt collectors as well come to that, will often use vaguely worded threats to imply they have more powers than is actually the case. For example, the bailiff employed by Woolwich County Court used to write "final van arranged" in red Biro on letters to debtors when warning of visits. No-one has ever managed to explain to me what a "final van" is, or how one might go about arranging one, or what you would do with it if you did. It just sounded vaguely threatening if you didn't think about it too much.
A bailiff can enter your property through an unlocked door or window and can seize goods left outside. One bailiff acting for Greenwich Council seized a child's pet bunny from a back garden.
A bailiff can only charge for one visit, even if they have made several. They will often lie about this and was one of the more successful money spinners for the bailiffs working for Greenwich Council.
Currently, bailiffs can charge £75 for sending you a compliance letter, that is, to ask for payment or issue the enforcement notice. If the bailiff attends you home, they can charge an additional £235 but they can only do this once. If they have seized your goods, they can charge £110 for removing and selling them. If a bailiff asks for or demands any other payments they are committing an offence. I would be really interested to hear of any cases where this is happening.
For general advice on how to manage your financial affairs if you find yourself getting into debt can be found on the
National Debtline website.
