Bankruptcy

A question about : Bankruptcy

I have an elderly relative who refuses to pay his land tax. He will be taken to court in January and declared bankrupt. He owns 1 property of around 10 acreas value around four hundred thousand pounds. He also has arouind 30 thousand pounds invested. Would the debt be taken from the liquid asset or would the property be sold. He refuses to pay due to what he calls neglect by the council building inspecters 14 years ago causing the building to leak an become unuseable upstairs. He owes different amounts of land tax over the past 4 years.

Best answers:

• He is certainly taking extreme measures to register his protest against the council, but unfortunately it is the council that has the upper hand in that they have the means and procedures to collect - in this case bankruptcy.
  I suppose he can state his reasons for non-payment to the judge, but I imagine that this has already gone through normal collection procedures and the judge will be primarily concerned with whether the council have acted properly in regard to the collection of this money.
  If declared bankrupt, then the OR will control all of his assetts and will appoint a trustee to realise enough funds, from the assetts, to pay the 'debt in bankruptcy'. My guess is that the OR will choose the quickest and easiest of his assetts to realise, inthis case, probably, the liquid assetts.
  Providing that these assetts are sufficient to cover the debt, plus costs of bankruptcy, then either the bankruptcy will be annulled and the balance of the 'estate in bankruptcy' will be returned to your relative forthwith, or will be returned on completion of the bankruptcy period.
  Just one word of caution, from someone recently declared bankrupt:
  The OR is very unlikely to get the best market price when realising assetts, and there are also fixed charges associated with bankruptcy, Court costs and Insolvency Service costs, which could be in excess of Ј3k. This is on top of the other implications regarding bank accounts, credit etc.
  I respect your relative's right to protest against the council, but he should see that, whilst it may get a bit of publicity, this will be like water off of a duck's back to the council, yet could have very long term implications for him.
  Is there no other way that he can make his protest about the council's alleged neglect?
• Thanks very much rog2. It is a difficult situation for me to deal with directly as I live in New Zealand.
• No there is no other relative in the UK. I am thinking about contacting the council and pay the debt for him. Upon his death the inheritance will come to me and my 2 brothers that also live in NZ. I will be travelling to the UK at that time to sell the property. I feel it would be best for me to settle his debt of 3500 pounds with the council to protect all parties involved.
• I dont know anyone over there. He is 79 of reasonable wellbeing. He is also very cautious of other people coming into his property. Should anything happen to his health situation and is hospitalised and cannot return to his home than I will be over there in 72 hours.