Wednesday, 12 February 2014

Fee rises will mean bailiff costs will exceed debts

Without much publicity, Tory minister Eric Pickles has announced that the fees that bailiffs will charge for collecting debts owed to local councils are to rise massively. It is likely that bailiff fees will start to exceed the average debt that is being collected.

Bailiffs are only ever used as a last resort by councils. Before it reaches that stage, someone will have received two reminders and will have been summonsed to court to have a liability order issued. Cornwall Council is always keen to reach a repayment schedule with anyone who owes us money and to avoid the court and bailiff system wherever possible. Even where a liability order is granted, bailiffs will still only be a last resort with options such as attachment to earnings being preferable.

At the moment, bailiffs are not able to levy a fee for making first contact (usually by letter) with a debtor. The charge for a first personal visit is £24.50 and for a second visit is £18. These charges are added onto the debt that is owed and are collected first. Should a bailiff remove goods for sale, then they can charge 'reasonable costs' - averaging £110 or so.

Under the new charging regime which comes into force on April 6th, the first stage will be a 'notice of enforcement' costing £75. An enforcement visit will be charged at £235 and the removal of goods stage charge will be formalised at £110.

So the average cost - before any goods are removed - will be £310, compared with around £24.50 now. Considering that the average debt to Cornwall Council that is enforced by bailiffs is a bit less than £300, it is easy to see that debts will be more than doubled by bailiff fees.

These charges are nationally agreed and not decided upon by Cornwall Council. I know the authority will look at any options that are open to us, and we will continue to use bailiffs only as a last resort, but we cannot afford to decide not to follow up on debts that are owed without putting vital frontline services at risk.

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