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Exeter City Council made a woman bankrupt for unpaid council tax

The Local Government Ombudsman - 04 March 2009

Exeter City Council made a woman bankrupt for unpaid council tax without making proper enquiries into her health problems. The Ombudsman says “I am very pleased to note that the Council has undertaken to pursue an annulment of the bankruptcy order, bearing any necessary costs itself. These are currently estimated at £10,000. I regard this proposed action as a suitable way of settling the complaint.”

‘Miss Byrd’ (not her real name for legal reasons) suffered from untreated mental and physical health problems, and owed the Council a significant sum in arrears of unpaid council tax. Her mother complained that that the Council had made her daughter bankrupt without giving proper consideration to her vulnerability, as her daughter had been incapable of dealing with her own financial affairs at the time the arrears had accrued.

The Ombudsman found that the Council had pursued this debt over a number of years without making adequate enquiries into the debtor’s health problems to determine whether this was a suitable course of action, although in 2001 she had told the Council that she was terminally ill. The Ombudsman criticised the Council for:

failing to have adequate written procedures to include standard checks at an early stage as to whether the debtor’s personal circumstances made bankruptcy proceedings inappropriate;
failing to make such enquiries; and
failing to keep a clear written record of the way its decisions were made.

However, Miss Byrd’s reclusive behaviour, while apparently a function of her mental health problems, would not have helped the Council in making these enquiries, and the Ombudsman was not able to say clearly that the Council would not have sought her bankruptcy even without maladministration. He was very pleased to note that the Council, as the only creditor in the bankruptcy proceedings, had withdrawn its claim, once it was made aware of the problem.

Source of the above News Story: Local Government Ombudsman website: www.lgo.org.uk

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Exeter City Council made a woman bankrupt for unpaid council tax

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