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Paying your council tax falls into the top priority list of debts, so when you fall into council tax arrears, it is important to take steps to pay it back as soon as you can.

Failure to do so could result in severe consequences as the council can apply to take unpaid council tax from you through your wages or salary, or you could even go to prison if you do not pay.

Read this guide as we explain to you what council tax arrears is, what happens when you don’t pay your council tax and how you can get help to pay it.

What is council tax arrears?

Council tax arrears are when you miss one or more of your council tax bill payments, which leaves you in debt. Like your mortgage and utility bills, your council tax falls under the top priority list of debts. It is crucial to pay these debts first with priority debts as they can have serious consequences.

What happens if I get a final notice for council tax?

If you have missed a payment with your council tax and are in arrears, your council will write to you requesting that you pay the outstanding debt within seven days. It is essential to try and get the debt paid within this period as things start to get trickier if you choose to ignore this letter.

If you don’t pay your outstanding debt within the seven days of the council writing an arrears letter to you, you will then be asked to pay all the unpaid council tax debt within a further seven days. Typically termed a ‘final notice’ from the council regarding your council tax arrears.

What is a council tax liability order?

If you cannot pay your council tax after the ‘final notice’ period, then your council will apply to the courts to collect the debt from you, known as a ‘liability order’. A liability order will show that you owe council tax to them, and you have not paid it after being notified. A council tax liability order means that the council could apply to the Magistrates’ Court to issue a court order against you.

As a ‘liability order’ is a legal demand for the outstanding debt, the council’s legal costs, as well as other costs, will be added to the money you owe.

However, it is crucial to understand that if you can avoid a liability order at all costs, then it is better. Even if you are struggling with your payments, try to keep on top of them. If you contact the council and explain your situation, you may agree on a new payment plan to avoid the council taking out a liability order against you.

Find out more about CCJs (County Court Judgements) or CCJ Discharged.

What if I can’t pay my council tax?

Once the council has taken a liability order in your name, they will ask you for specific information about your earnings, any other source of income (pensions or benefits), whether anyone else is liable for the debts, and additional personal information.

You will have 14 days to present this information to the council. It is a criminal offence if you don’t liaise with the council or, even worse, provide false information.

Once the council has obtained that information, they will recover the outstanding debt you owe them.

  1. Council can recover debts from your wages

If you cannot pay your council tax after the council has made a legal demand for you to pay your arrears, your council has the right to take any unpaid council tax directly from your wages by liaising with your employer.

  1. The council can recover debts from your benefits.

Suppose you receive benefits from employment support allowance, income support, job seeker’s allowance, pension credit or universal credit. In that case, your council has the right to apply to take money from your benefits to pay any outstanding debts.

  1. Council can recover debts using bailiffs

Your council can send enforcement agents, most commonly known as ‘bailiffs’, to recover the money you owe to them. This process can only happen once a liability order has been placed against you. A private firm of bailiffs collects council tax arrears on behalf of your local council. Their job is to take your goods and belongings and sell them to raise money to pay your debts.

There are a few critical points to consider when it comes to bailiffs:

  • Bailiffs must be ‘certified’, which means the certificate must be authorised by the County Court to enable them to act as a bailiff.
  • Bailiffs must give you seven clear days (excluding Sundays and bank holidays) notice before they visit your property. This is often called an enforcement notice.
  • A bailiff may ask you to agree to make a ‘virtual’ or non-entry controlled goods agreement (CGA) when they make contact with you via telephone or letter. You do not have to agree to create a virtual CGA; however, it is vital to get the right advice on this matter if you are considering this.
  • Bailiffs are not allowed to force entry into your house; however, they can do if they have taken control of your goods inside your home; you have made a CGA agreement with the bailiff, but you have missed at least one payment, or they have given you two clear days’ that they are coming to inspect or take your goods.
  • Bailiffs are not allowed to take goods worth a lot more than you owe.

In essence, it is essential to avoid getting into the position whereby bailiffs are involved in obtaining goods from your property. There is plenty of advice regarding council tax bailiffs, so ensure you know your rights before giving them access to your home and property.

Can I go to prison for not paying my council tax?

If the council has used bailiffs and you still haven’t paid your council tax in full, councils can apply to the Magistrates’ Court to send you to prison for up to 3 months.

Prison sounds like a scary prospect; however, it is essential to know that the court can’t send you to prison if you can’t afford to pay. They will only do this as a last resort if you have deliberately refused to pay your arrears.

The court will always carry out a means-tested inquiry before they decide to send you to prison. The courts will take your affordability and the situation considered.

How do I stay out of council tax debt?

Falling into any debt can quickly happen, and council tax is no exception to the rule. Misplacing your post or moving home can mean that the all-important council tax letter may get overlooked. This can mean one or more missed payments. Whatever your reason, you are not alone regarding debt. So, what should you do to avoid getting yourself in this situation?

  1. Organise you bills

As much I hate paying bills, staying organised and on top of any correspondence is crucial. Get yourself a folder and file (electronically or paper), so you can keep your account organised and itemised in one place. You will know if there is a missing one and may be more inclined to investigate if you have any missing correspondence regarding your bills.

  1. Budget

Budgets might sound boring, but they can be a lifesaver in the long term. As your council tax is one of your most significant monthly payments, you must account for it in your budget to ensure that you can cover its costs whilst still having enough money to pay for other bills and outgoings.

Download our handy budget planner so you have all the information to hand.

Did you know one of the best ways to cut your costs is to look at your monthly food budget?

  1. Be honest

Honesty is the best solution if you have trouble paying your council tax. Burying your head in the sand and hoping it will go away is not a solution. Instead, call your local council up and explain your situation as soon as you can, as you may be able to come to an alternative payment agreement. If your council tax is spread over ten months, you could arrange to pay it over 12 months. Being upfront about your situation could avoid you going to court or having the bailiffs knocking at your door.

  1. Check your eligibility

If you are now receiving benefits or are a student, did you know that you could be eligible for a discount on your council tax or don’t have to pay council tax? Every little helps, and if you are entitled to a reduction on your council tax, then be sure to take it. Please find out more about your eligibility by reading our FAQs at the end of the article.

  1. Share the responsibility

This is particularly important for anyone who is living with other people. Share the bill with other people on the property and if they have already agreed to help you pay, make sure they pay on time so you are not struggling when payment time arises.

Can my council tax debt be written off?

In exceptional circumstances, the court may order the council tax debt you owe to be ‘written off’ entirely, so you don’t owe the council anything.

Through Section 13A (1)(c) of the Local Government Finance Act 1992, ‘discretionary relief’ is meant to be used if your home is inhabitable due to a fire or flood. However, the act also covers severe hardship or suffering from physical or mental health issues.

When you are in severe hardship, it means you don’t have any money left over to pay your council tax after paying your living costs. If you feel like you fall into this category, you will need to write to your local council and apply for discretionary relief, quoting s13A Local Government Finance Act 1992. You will also need to prove that you can’t afford to pay the debt back.

The council must consider all applications and can not dismiss them without looking at all the evidence and circumstances presented to them.

I can’t pay my council tax. What help can I get?

If you are already in debt and feel like there is no way out of it, it is essential to understand that help is available. Debt solutions can help you pay back your council tax and keep the bailiffs at bay. So, what are these solutions?

Debt Relief Order (DRO) and Council Tax Debt

A debt relief order (DRO) is one of the debt solutions available to you, if you have a debt of £20,000 or less, your maximum disposable income is £50, and you do not have assets (including property and vehicles) or savings and investments worth more than £1,000.

If you have council tax arrears, then a debt relief order is could be a possible debt solution for you. A DRO is a cheaper and quicker alternative to bankruptcy. Currently, DRO can cost £90 to apply and can be completed within 12 months. However, it is essential to understand how it will affect you and whether you meet the eligibility criteria.

Please find out more about a DRO (Debt Relief Order) and see whether it is the right debt solution for you.

Bankruptcy and Council Tax Debt

Bankruptcy is a type of insolvency that helps you deal with debts you cannot afford to pay off within a reasonable period. It is a legal process through which you can write off the debts you have been unable to pay and may involve selling off certain assets (your belongings and property).

If you go bankrupt, most debts, including council tax, is written off from previous years when you are discharged. This usually happens after a year.

Please find out more about bankruptcy and see whether it is the right debt solution for you.

Individual Voluntary Arrangement (IVA) and Council Tax Debt

An Individual Voluntary Arrangement (IVA) is a legally binding arrangement made between you and your creditors to pay off your debts with a repayment plan that suits your circumstances.

Since it is a formal and legal debt solution, you and your creditors are obliged to maintain the agreement. Once you enter an IVA, your creditors cannot take any further action against you.

Once your IVA is put into place, your council tax arrears can be included in your IVA payment each month. There are benefits when entering into an IVA with council tax arrears. The most significant advantage is that once you are in an IVA, the bailiffs will stop contacting you demanding payments and goods.

Please find out more about an IVA and see whether it is the right debt solution for you.

What is council tax, and why do I have to pay it?

A council tax bill is a fee you must pay to your local authority every year. The bill generally consists of 10-12 monthly payments, which you pay to your local council. If you pay over ten months, you usually get a two-month break before your next council tax payment starts between February and March.

Why do I have to pay council tax?

Council tax helps to pay for different public services. These include education, maintenance of the roads, green spaces, public parks, libraries, and public museums.

How much council tax do I have to pay?

The amount of council tax you pay depends on your house’s valuation or the ‘band’. This is set by the Valuation Office Agency (VOA), where a different amount of council tax is charged depending on your band. The bands are set from A-H, with A’s lowest valuation and H’s highest.

Do I have to pay my council tax?

Yes. Unless you are exempt from council tax or could pay a reduced amount.

Firstly, you must be paying the right amount of council tax and are in the right band. If you feel like you should be in a lower band, check the banding below or contact your local office to clarify this.

However, you are exempt from council tax if you fall under the following criteria:

  • The property is vacant due to a death
  • If all the members in your household, including yourself, are full-time students
  • If the property you own is part of a charitable organisation
  • If all the people living in the home are under 18
  • If any of the residents have severe mental impairments
  • If the property is empty and the person occupying it is being cared for elsewhere
  • If you are a student nurse
  • If you are on an apprentice scheme (you will need a letter from your employer starting you are being paid less than £195 a week)
Can I get a reduction or discount on my council tax?

Even if you do not fall into the council tax exemption criteria, you might still be able to reduce your council tax payment. This applies to people who live alone, claim benefits, have low incomes.

To find out whether you qualify, you can check out the government website for more details or if you are claiming the following benefits:

  • Universal Credit
  • Pension Credit
  • Income Support
  • Job Seekers Allowance
  • Employment and Support Allowance

It is not only benefits that may allow you to qualify for a council tax deduction. For example, if you’re a student, have a disability (or someone you live with does), or suffer from a severe mental impairment.

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