In the current economy, many individuals are struggling financially and seeing their debt increase. People have to make difficult decisions as to which bill or debt is paid on a month by month basis, and for some, it may be a case of paying a bill or putting food on the table. Missing just one council tax payment can result is slipping into arrears, and while it is not technically a criminal offence to not pay it, as with any debt, it can cause severe stress and illness and potentially the debtor could lose their home if facing bankruptcy. Council tax should be regarded as a priority payment.
What will the council do if I am arrears with my council tax?
If the outstanding bill is not settled within 28 days of the due date, the local authority will likely have a court summons issued from the magistrates court. If there have been previous missed payments (usually two) and the arrears has not be paid within 28 days, then the council can ask for the full amount of council tax owed in one go. When a court summons has been issued and the arrears have still not been repaid, then the courts could issue a liability order which may result in the debt being deducted from wages, income support or Jobseeker's Allowance. Alternatively the debt could be passed to a bailiff to seize goods to the value of the debt.
What can I do if I am arrears in council tax?
As with any debt, the first step is to contact the creditor (in this case the local authority) and explain the situation. They will often give time for the individual to propose a repayment schedule. The next step is to calculate income vs. essential expenditure (necessary expenses in order to live, such as rent or mortgage, bills for gas electricity and water, council tax and a reasonable food/household goods allowance etc. Television packages, for example, may not be considered an essential expense). By calculating how much income is left over, it will be possible for the individual to propose an additional payment on top of the normal monthly bill to clear arrears. If there is insufficient income to allow for extra payments, it is important to seek advice from a licensed money advisor or from one of the free advice services such as Step Change, or e Citizens Advice Bureau (CAB). It may be that the individual is insolvent and therefore a solution such as an Individual Voluntary Arrangement (IVA) or Debt Relief Order (DRO) may be appropriate.