Quizzes & Puzzles2 mins ago
Tax Credits & Bankrupt
Are tax credit overpayments written off when you are bankrupt.
Does the classification matter.
ie Judgement for overpayment , demand for overpayment but no enforcement , overpayment identified but not collected pending review.
We have all three types totalling over 8k
Does the classification matter.
ie Judgement for overpayment , demand for overpayment but no enforcement , overpayment identified but not collected pending review.
We have all three types totalling over 8k
Answers
1 to 3 of 3
Best Answer
No best answer has yet been selected by Chris1918. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.
I've known of a case where the Official Receiver got this wrong!
If the overpayment relates to a tax year which has ended, and for which the tax credit award has been finalised (i.e. the renewal has been done & an award notice stated to be final has been issued), then the overpayment is a debt in the bankruptcy. However:
1. If the tax credit claim was a joint one (husband & wife etc.) & only one of the claimants is bankrupt then collection of the debt will continue against the non-bankrupt party.
2. If the bankrupt is the sole claimant & is still getting tax credits then deductions to recover the debt will continue throughout the bankruptcy but the remainder will be written off when discharge from bankruptcy takes place. If entitlement to tax credits has ended, then none of the debt is payable by the bankrupt.
3. Any overpayment not covered by the 2nd para. above is not a bankruptcy debt & will still be payable.
4. If you are still getting tax credits you need to notify the Tax Credit people of the bankruptcy (send a recorded delivery letter & a copy of the Court order); also notify them in the same way of the discharge when it occurs & request them to write off the debt if you are the sole claimant.
These rules apply whether judgement has been obtained or not & whether a review is pending or not.
If the overpayment relates to a tax year which has ended, and for which the tax credit award has been finalised (i.e. the renewal has been done & an award notice stated to be final has been issued), then the overpayment is a debt in the bankruptcy. However:
1. If the tax credit claim was a joint one (husband & wife etc.) & only one of the claimants is bankrupt then collection of the debt will continue against the non-bankrupt party.
2. If the bankrupt is the sole claimant & is still getting tax credits then deductions to recover the debt will continue throughout the bankruptcy but the remainder will be written off when discharge from bankruptcy takes place. If entitlement to tax credits has ended, then none of the debt is payable by the bankrupt.
3. Any overpayment not covered by the 2nd para. above is not a bankruptcy debt & will still be payable.
4. If you are still getting tax credits you need to notify the Tax Credit people of the bankruptcy (send a recorded delivery letter & a copy of the Court order); also notify them in the same way of the discharge when it occurs & request them to write off the debt if you are the sole claimant.
These rules apply whether judgement has been obtained or not & whether a review is pending or not.
1 to 3 of 3
Latest Posts
ChatterBank9 mins ago
ChatterBank12 mins ago
Technology24 mins ago
Are The West In The Grip Of The Woke...
News26 mins ago
