I am pondering something I've come across with a client and would appreciate any thoughts:

Client was given overpayment decision in 2005 which she challenged and in the way of Local Authorities never heard anything back and decided not to chase it up. She went bankrupt in 2007 and made a new claim for HB- overpayment reared its head and HB section started deducting from her HB. She is now discharged from bankruptcy and it seems to me from SoS V Balding (2007) that her liability for that overpayment (although she still maintains that she was not overpaid in the first place) disappeared when she was discharged.

She has only recently come to our service and I'm begining to think about what we can do about the recovery and the overpayment as a whole, given the length of the timescales involved...

Any suggestion?

Cheers.

I think the law on this is quite clear. If the overpayment decision predates her bankruptcy (which it did) then the debt is included in the bankruptcy whether details of it are shown on the bankruptcy form or not. Unless the debt was incurred through fraud (if this was suspected Cl. would presumably have had an IUC) the debt is then written off on discharge from bankruptcy.

A copy of the bankruptcy order & the discharge notice should be given to the Council with a request to write off the remainder of the overpayment and return any amount deducted after the discharge date.

The Official Receiver who dealt with the bankruptcy should also be given details of the debt.

There is no point in Cl. continuing to dispute the overpayment when the matter can readily be settled in this way.