September 2020 sees Northern Ireland’s courts open up again after lockdown, and of the 600+ cases listed to be heard in the Belfast High Court this month, 30 of those are petitions for bankruptcy by Land and Property Services (LPS), who are responsible for administering and collecting rates.
That’s 30 individuals or families who could potentially lose their homes because of unpaid rates bills – an average of one home at risk every day.
Land and Property Services take rates arrears very seriously. Rates are taxes and as a property owner you’re legally obliged to pay them, so if you don’t, LPS will pursue unpaid bills through the courts.
Northern Ireland businesses were granted a four-month rates payment holiday in 2020 to mitigate the effects of lockdown. Whilst domestic rates have been frozen for the next year to help homeowners, and there was a two month ‘breathing space’ delay in billing, domestic ratepayers in Northern Ireland have not been granted a payment holiday.
It’s easy to lose track of, become overwhelmed by, or simply avoid or put off dealing with bills. Often, people who come to us for help are unable to say exactly how much debt they are in, or didn’t know they were due in court – because they haven’t been able to face opening the letters that arrived.
How do I tackle the problem?
Now that so many of us are facing job insecurity and/or reduced income, problem debt and mounting bills can be even more frightening. The most important thing is not to panic. When faced with a threat of any kind, our brains are wired to do one of three things – fight, flight or freeze.
With bills, avoiding (flight) or doing nothing (freeze) makes the problem worse – the only way to solve it is to confront it – but with our help, it doesn’t have to be a fight.
Before it goes to court
If you have received a payment reminder, a final notice or even a notice for court, a good Insolvency Practitioner should be able to secure a fair arrangement for repayment.
They will look at your total debts, negotiate on your behalf with all organisations you owe money to, and create a repayment plan known as an Individual Voluntary Arrangement (IVA) that will be affordable for you, acceptable to all your creditors, and will pay off your rates bill without the need for any further court action by LPS – provided you stick to the terms of the repayment agreement of course.
Tackling the problem at this stage and entering into an IVA can save you literally thousands of pounds compared to reversing a successful bankruptcy petition.
After it goes to court
If you haven’t paid your bills or contacted LPS by the time your case goes to court, LPS will take further court action against you, which can include:
- more costs to pay
- money taken directly from your earnings and bank account
- seizing and selling your valuable possessions
- bankruptcy proceedings for debt over £750 – you could lose your home
However, it is possible to reverse a bankruptcy order.
It’s a lot more expensive to do, as you might imagine, with additional costs to pay for the official receiver, LPS’s court costs, the Insolvency Practitioner’s fees and the annulment costs. With these additional costs – coupled with the initial unpaid LPS bill of say £5,000 – you could find yourself owing around £20,000.
While we obviously advise against letting the LPS debt get to this stage, reversing the bankruptcy is obviously a much better option than risking your house. It allows you to enter into an IVA in order to pay off your debts by an affordable monthly amount, avoiding your house and valuable items being sold off to pay the debt.
What should I do right now?
Our key message with all debt and cash flow issues is the same and it comes in two parts:
- The earlier you contact us, the better the outcome and the less it will cost you.
- It’s never too late to contact us – we can always help no matter how bad things look.
If a rates bill is giving you sleepless nights, give us a call right now on 028 9244 8112 or email email@example.com
Our local advisors will treat everything you bring to us in complete confidence and if we can point you in the right direction for free, we always will.