Debt Management Plan Council Tax – Payment Guide
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Are you trying to figure out how to handle your council tax debts? You are in the right place for answers! We know that dealing with council tax debt can be a big worry and we’re here to help.
Every month, over 170,000 people come to our website for advice on debt problems and find clear, helpful information.
In this article, we’ll talk about:
- What to do if you have council tax debts.
- Why council tax is so important to pay on time.
- Ways you may be able to write off some debt.
- What to do if you can’t afford to pay your council tax.
- What happens if you miss a council tax payment.
Our team understands how hard it is to deal with debt, as some of us have been there ourselves. We’re here to help you find a way through your council tax debt problems.
Let’s dive in and learn more about debt management plans and council tax.
Can Council Tax Debts be Included within a Debt Management Plan (DMP)?
| As a rule of thumb, you need to be aware of the fact that priority debts (such as Council Tax debt) cannot be included within a debt management plan. |
Thus, if you’re thinking of addressing your council tax debts by opting for a DMP, you should think about it again because they cannot be included within your repayment plan.
» TAKE ACTION NOW: Fill out the short debt form
Your DMP provider will probably warn you about this when you’re setting up your DMP but it’s important that you be aware of this beforehand.
A DMP is an informal agreement that can be utilised to take care of unsecured, non-priority debt such as credit card debt.
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
How Will My Council Tax Bills be Treated if I Enter into a DMP?
If you have other unsecured debts that you need to take care of using a debt management plan, then you can definitely do so.
All of your unsecured debts will become part of a reduced payment plan but any priority debt that you have such as Council Tax debt will have to be paid separately.
This means that while you’ll be making a monthly payment to your creditors as part of your DMP, you will be addressing your council tax bills separate from your DMP.
When your initial offer for your DMP is being drafted, your council tax bills will be taken into account as essential living costs.
» TAKE ACTION NOW: Fill out the short debt form
Hence, when you’re opting for a DMP, you need to be aware of the fact that you’re going to have to be addressing priority debt(s) such as these alongside it.
You’ll need to work out how much you can afford to pay in terms of your monthly payments to your DMP.
This is important because as a result of the money you owe to your local council, the monthly payments that you can realistically afford as part of your DMP might be so less that your creditors might not agree to it.
This is definitely something you should explicitly ask about when you’re drafting your initial offer for your DMP that you’re going to present to your creditors.
