26 May 2023

Helping Erewash BC recover council tax and sundry debts

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Alexandra Ottley Senior Associate
Council Tax Bill Letter Head

Our client at Erewash Borough Council (Erewash BC) in Derbyshire was becoming increasingly frustrated with the chasing of a very large council tax and sundry debt from one of their landlords who resided out of the area.

Following an initial investigation through our resolution service, we were able to advise the council of the best remedy to recover the very substantial amount.

Checks to the Land Registry and Credit Reference Agency records enabled us to determine that there was sufficient equity to support the commencement of bankruptcy proceedings. Following instructions from the council, our dedicated local authority team progressed the bankruptcy action which resulted in the making of a Bankruptcy Order.

After the debtor was declared bankrupt, our dual qualified solicitor and insolvency practitioner colleagues, Gary Taylor and Matthew Dix, were appointed as joint trustees. The bankruptcy estate comprised a significant property portfolio of 12 investment properties, one family home, and around 15 properties that had been sold prior to the making of the Bankruptcy Order.

Following the appointment, they:

  • established the position in relation to each investment property

  • took over management where necessary

  • collected rent

  • liaised with LPA receivers and mortgage lenders

  • took possession of some of the properties, sold them, and accounted to the estate for any sale proceeds

Extensive investigations were also carried out into the disposal of the properties pre-bankruptcy in regard to the validity of these transactions, and whether any could potentially be challenged.

Once the investment property portfolio and investigations had largely been dealt with, the trustees turned their attention to the family home. Despite resistance, the trustees were able to secure a sale to a developer which generated sufficient sale proceeds to pay in full creditors’ claims (in excess of £350,000) plus interest at 8%. The property interests spanned multiple local authorities, all of which benefitted from the action.

Simon Hamilton, revenues manager at the council, commented:

“The decision to make someone bankrupt for unpaid council tax is not a decision we take lightly. This particular case was not without its challenges.

“The debts had accrued over quite a period of time - although we were able to make an initial contact with the debtor, he remained very evasive and always maintained that he was beyond the jurisdiction of English law as he claimed he was out of the country. This left us no other alternative but to pursue the case further using the team at Wilkin Chapman.

“I am convinced that we would not have received a single penny of the debt if Wilkin Chapman had not assisted us to collect the amounts due via the legal process.”

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