Hi RBSB.

DAS isn't going to be an option if there is no disposable income.

Council tax and utilities etc are obviously the priority rather than dealing with unsecured debts.

If they became bankrupt would they be able to afford their essential living costs each month? If not, bankruptcy can only really be one part of any answer to the wider financial problem.

My thoughts were that the house without equity is only really at risk if nothing is done, ie status quo continues.

Utilities are now on payment metercard and council tax benefit is likely to be paid. Family will still help with food and clothing essentials but there is nothing left over.

The historic debt is small and relates to utilities and council tax. I'm not sure Bankruptcy is helpful or necessary?

For small amounts of debt, A DAS with low monthly payments (£20) stretched over a longer period would avoid sequestration.

Is there any risk of losing their home if they keep up the mortgage and have no equity, DAS doesn't look at rising equity at all does it?

It seem t me that no solution will suit here, if they cannot make ends meet with little or no amounts to pay back then they have to address the primary problem which is they aren't earning enough to cover their costs of living

That's really where I was coming from as well on track, though I guess we're assuming that from what RBSB has said rather than it being there in black and white.

I also haven't heard about a DAS being set up with a payment of £20 per month, though I'm not saying that this means it cannot happen.

Informally negotiated small repayments might work as an alternative, but they do of course need to be affordable after other more important things are paid out first.

Thanks all- the reality is things may improve now both are out of work-Nuts?

One partner out of work for 5+ years, refused to claim benefit, the other working part time and not managing to pay their way.

I think the dire lack of any funds is the biggest factor and comments are spot on, they concluded bankruptcy is best because they would keep the house. I just wanted to clarify-it's not really an issue unless someone wanted to apply to bankrupt them or gain an inhibition against the future sale of the property?

I agree with everything that has already been said.

I'll add that you can't go for a LILA bankruptcy if you own a property. Even if it's in negative equity.

Thanks Candlewick, I wasn't sure if that was the case. I'm not really sure what information or advice source has led them to think of bankruptcy being a solution. It is as simple as not enough coming in. The mortgage continuing to be paid is the biggest factor in preventing repossession rather than a formal solution.

They would each have to find £200 application fee if they wanted to apply for bankruptcy too, which sounds like it might be a problem. And they'd have to owe more than £1500 each.

Thanks Kevin, I forgot that there would be the application fee too. That would be a hurdle. I don't think it's really an option that has any lasting benefit to justify finding help with that.

Just to update - I've been told the plan is to 'let' someone else(Council tax) apply to sequestrate as that has no application cost and will not affect their home, no income can be deemed as available for contributions.

Does anyone know what timescale council tax are likely to work to in applying for someone's sequestration?

It could be a long time, RBSB. I've seen people rack up over 10 years worth of council tax arrears before a local authority thinks about sequestratin.

Hi RBSB,

We deal with a large volume of sequestration cases that have been declared bankrupt by the council. As Kevin said, this can take years before a council finally decides to take this action.

I would be cautious of waiting for this to happen. In our experience in the cases that we have that we have seen for council tax arrears it normally does take 4-5 years of arrears.

If they can, try to deal with the applications separately. Save up the £200 to do one application then a couple of months later complete the other one.

It is possible to pay the application fee by instalments these days if this makes it easier - there are instructions for doing so on the application form.

The application cannot be sent off until the fee is paid in full but that can be done over a period of months if necessary.

Thanks Chris and Kevin. It's my impression that council tax are quick to act on arrears and wages arrestment seems quite quick (there is now no employment in the household to permit that) but I actually don't know of anyone who's been sequestrated by a council. I'll pass it on re. being able to apply with staged payments to avoid a lengthy wait.