Council Tax Arrears
Council tax is a priority debt that needs to be paid before certain other debts, such as credit cards and store cards. If you are in arrears with your council tax, you may already know that local councils have the power to enforce repayment via a number of measures, and usually take steps to recover their money quickly.
By communicating with them openly and being proactive in trying to deal with your debt, however, you may be able to ease the situation. Falling behind with council tax payments is a serious state of affairs, but they may be open to negotiating lower instalments that allow you get back on track.
How does council tax work?
Local authorities send out council tax bills annually, and payments can generally be made in instalments over 10 or 12 months. How much you pay is based on the value of your property and the number of people living there, but you may be eligible for a reduction depending on your circumstances.
If you live on your own you are entitled to a 25% reduction on the bill, for example, but council tax relief may also be available if you are on a low income or your home has been adapted for disability.
What happens when you miss a council tax payment?
If you miss a payment your council will send a reminder letter after two weeks, requiring payment of the instalment within seven days. If you pay the amount within the deadline you can generally continue paying your council tax in instalments.
Failing to pay the missed instalment within seven days will mean a Final Notice from the council, whereby they withdraw the facility for you to pay by instalments. Payment of the total bill in full becomes due, again within seven days.
This is clearly a challenging situation for anyone, but when you are already in a poor financial position it can feel overwhelming. It is important to seek professional assistance if you cannot pay, as there are likely to be several options open to you.
What enforcement action can be taken by the council?
The council can apply to the court for a Liability Order. This is a court demand for payment of your total council tax liability, typically plus the council’s legal costs.
Attachment of Earnings
An attachment of earnings order instructs your employer to take payment directly from your earnings at a pre-stated and fixed proportion of your wages.
Taking money from benefits
The council can apply to the court to take money directly from your benefits if you receive Employment and Support Allowance, Jobseekers’ Allowance, Income Support, Universal Credit, or Pension Credit.
If other options are unavailable or unsuccessful, the council may decide to use bailiff services and seize goods from your home to the value of your debt, plus an additional sum to cover the bailiff’s services.
Should the bailiffs be unable to recover the full amount owed in council tax, the council can take you to court. In some instances, a prison sentence of up to three months can be handed down – this is generally in relation to a deliberate refusal to pay, however, rather than being unable to pay due to poor financial circumstances.
How can we help you with council tax arrears?
UK Debt has extensive experience of helping people with council tax arrears, and can quickly assess the most suitable options. If you are proactive in seeking assistance, we can intervene at an early stage by producing a detailed budget to demonstrate the validity of your financial position.
Our licensed insolvency practitioners will communicate with your local council on your behalf, and put forward a realistic plan for repaying your arrears if you have officially lost the right to pay in ‘standard’ instalments.
If negotiations are unsuccessful, and you owe money to other creditors, you may be eligible to enter a formal insolvency procedure called an Individual Voluntary Arrangement (IVA). This entails payment of a single affordable monthly repayment that is divided between the creditors included in the agreement.
An IVA also offers further advantages if you are eligible, including protection from creditor legal action and freezing further interest and charges on your debts.
For more information on how we can help, please contact our expert team to arrange a free same-day consultation.