An IVA may not be suitable in all circumstances.
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Council Tax debt is just one of these expenses which seems to creep up on you. It’s common to think the lenders which demand payment the most are more important. However, miss payments on this and you could even be sent to prison. That’s why it’s important to resolve this debt as soon as possible.
Council Tax debt is a priority debt and, as such, should be resolved as soon as possible. However, if money is tight, this is easier said than done. If you miss a payment, the collection process for this type of debt is more extreme compared with others and – initially – you can expect:
This means, in theory, a bill for £100 can turn into an invoice for £1,200 in just over a week. You then have another seven days to pay this amount or else the council could take legal action against you.
If you can’t pay your Council Tax – and few would be able to pay a sudden bill for £1,000 or more – your authority will probably take legal action against you. The most common options are:
Councils can take money from your income in two different ways. The first is through deductions from your benefits. This can include universal credit, income support, or employment and support allowance. It’s worth noting that authorities must leave you with enough money though to live off.
The second is through wage deductions. Using an ‘attachment of earnings order’, a council can request the money directly from your earnings. In this situation, your employer would make the necessary changes to your salary and send the money to the court.
Councils can employ bailiffs to collect Council Tax debt but these individuals can’t break in unless you’ve previously allowed them entry. They can also only force entry if collecting tax debts from HMRC or if they’ve been ordered to by a court.
Council Tax debt can lead to imprisonment for a maximum sentence of three months. However, it’s important to note this only happens in extremely rare cases. Over almost a decade, less than 700 people have been jailed for not paying Council Tax.
You can get Council Tax debt written off but this depends on the authority and how they vote in a creditor meeting.
An estimated 2.2 million households were behind with their council tax between 2017 and 2018* – that’s almost ten per cent of all households.
*According to Citizens Advice, 'Harsh collection methods adding half a billion in fees to people’s council tax debt, Citizens Advice reveals', April 2019.
Council Tax debt is something we hear about very often. People often mistakenly feel it’s a non-priority debt as, when you miss a payment, you usually won’t hear anything about it for several days. In contrast, with something similar to credit card debt, it’s common for creditors to start chasing for payment within a few hours of missing a deadline.
Fortunately, we could help resolve Council Tax debt through a solution known as an IVA:
An IVA is a formal debt solution which freezes interest and charges and allows you to make affordable monthly repayments over usually at least five years. When this agreement ends, any remaining debt is written off.
A Debt Relief Order is another solution which could help resolve Council Tax arrears. Although we don’t offer this option – suitable if you owe £20,000 or less and don’t have assets over £1,000 – most of your debts are written off if your financial situation doesn’t improve in a year.
Under Bankruptcy, Council Tax debts will be written off. However, this isn’t without cost. While often viewed as a fresh start, many of your assets will be repossessed to reclaim as much money for your creditors as possible. Although we can’t help you set up Bankruptcy, we could still determine if it might be the most option for you.
Council Tax debt can become unmanageable very quickly which is why it’s important to seek debt help as soon as possible. Otherwise, you could face a bill which is just impossible for you to repay.
Just get in touch through the button below and we’ll let you know if a debt solution could help you.
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* As of 10/02/22 20,601 of our customers were in an active IVA. ** Average unsecured debt anticipated to be written off for IVAs approved between 1 January 2021 and 31 December 2021 for FSS customers is £10,645.20, based upon successful completion. *** Based on independent verified reviews from Feefo.