Council Rent Arrears – Detailed Guide, FAQs & Tips

Dealing with council rent arrears can be tough and confusing. But you’re at the right place to get help. Each month, over 170,000 people come to our website for advice on debt, so you’re not alone.

In this clear guide, we will cover:

• Steps to take if you can’t pay your council rent.
• How to ask for housing benefit.
• How council rent arrears might affect your credit score.
• If the council can evict you for rent arrears.
• How much rent arrears can pile up before you might face eviction.

Research shows that the average council tax debt among those seeking support from Citizens Advice has remained stable at £1,100 over the last year.¹

We understand your worry about not paying council rent and the fear of legal action. We’re here to help you understand your options and what to do next. It’s very important not to ignore notices from your local authority about rent arrears.

So, without further ado, let’s work through this together.

Shouldn’t I apply for Universal Credit instead?

The aforementioned benefit is being phased out by Universal Credit, meaning some people should apply for this instead. What benefits you should apply for may be different based on where you live. Make sure you apply correctly by speaking with your local DWP office. 

What happens if you are behind on payments?

If you are behind on housing payments, your local authority will send a notice and ask you to pay what is owed. You should take action if they write to you or risk court action and even being evicted. If you cannot afford to pay your arrears, it is advised to talk with the authority and explain your situation. 

The same applies to people who rent private accommodation. You should speak with your landlord to explain the circumstances and ask for a reasonable way to repay and continue living at the property. Work out how much you can afford to pay before making an agreement. 

Can the council evict me?

If you do not pay the rent for your council house, you could lose your home. Arrears is one of the most common reasons to be evicted, along with anti-social behaviour. 

Getting a tenant out is not a quick process and there may be opportunities to not lose your home. This doesn’t mean you won’t be responsible for paying what you owe. 

How much arrears can accumulate before eviction?

The process to evict you can only start once you have missed eight weeks of rent. If you pay monthly, this means that the eviction process can begin if you miss two payments. Courts typically prioritise people causing anti-social behaviour or significant arrears before others, so the timeframe of an eviction can vary.

Contact your landlord or letting agency to see if there is an alternative way to pay what you owe. Normally there is an easier solution if you are open and honest – but never guaranteed! You could always dial a charity number for additional assistance. 

The 4 Stage Process

The process is almost identical whether you live in accommodation owned by a landlord, housing association or local authority. 

1. Notice to pay

The local authority will write to you and ask you to pay the money you owe. If you agree to pay, the process will stop. The letter will threaten court action if you do not pay by a certain date.

2. Possession proceedings

If you have not paid what you owe in full or come to an agreement by that date, court action begins. You will be sent forms to complete by the court. A registered charity can help you fill these in and defend yourself. 

3. Hearing

At the hearing, the judge can decide to issue either a:

1. Suspended possession order – meaning the tenant can continue to live as per the current housing tenancy but will lose it if you do not meet certain terms.
2. Outright possession order – meaning the tenant must leave the housing tenancy when instructed.

4. Enforcement

If you default on a suspended possession order or are given an outright possession order, the local authority could employ bailiffs to get you out if you do not voluntarily leave. 

You will still be responsible to pay the amount of debt you owe, but you can speak with a housing association to help find new accommodation. 

» TAKE ACTION NOW: Fill out the short debt form

Can I be rehoused?

It can be difficult to get rehoused if you have outstanding debts to a housing association, local authority or landlord. You may need to talk with them and agree to pay what you owe before being considered for rehousing. 

Can I get a debt solution?

No, you can’t get a debt solution for rent arrears. That said, you might be able to use a debt solution to help you with your other debts. This might be enough to help you get back in control of your finances and paying your rent again.

There are several different debt solutions available in the UK, so I recommend speaking to a debt charity as soon as possible. Their advisors will be able to look at your finances in detail and help you work out which debt solution will work best for you.

I have linked a few charities that offer these advisory services for free below. But before we dive into that, here’s a quick list of the most common debt solutions at your disposal.

Debt Strategy	How It Can Help With Council Tax Arrears
Flexible Payment Arrangements	Local councils often offer the option to spread council tax payments over 12 months instead of the standard 10.
One-Off Payment	If feasible, pay council tax in full and potentially negotiate a slightly reduced amount.
Hardship Schemes	Council Tax Reduction (CTR) Discretionary Relief Hardship Funds Support for Vulnerable Individuals COVID-19 Specific Support Charitable Grants
Discounts and Exemptions	Check for eligibility for discounts (e.g., single-person discount of 25%) or exemptions (e.g., properties unoccupied due to the resident’s death, properties where everyone’s a full-time student, or a resident has severe mental impairment)
Deferred Payments	Some councils allow deferring payments wherein you’ll pay less now and make up for it later.
Challenge your Council Tax Band	If you believe your property’s council tax band is incorrect, you can challenge it to potentially lower future payments and refund previous overpayments.
Debt Solutions	Certain formal debt solutions like Debt Relief Orders (DRO), Bankruptcy, and Individual Voluntary Arrangements (IVA) can potentially write off council tax arrears,
Professional Debt Advice	UK residents can seek free advice from debt organizations and charities for council tax guidance tailored to their specific financial situation.

Individual Voluntary Arrangement (IVA)

An IVA is a formal agreement between you and your creditors. You agree to pay a monthly sum that is distributed amongst your debts, and your creditors agree not to contact you during your IVA.

IVAs typically last for 5 or 6 years, and any outstanding debt is wiped off when it ends.

Keep in mind that IVAs are not suitable for everyone. You need to owe several thousand pounds to more than one creditor to be eligible. You also need to demonstrate that you have some disposable income every month.

Trust Deed

IVAs are not available in Scotland. Instead, you will need to opt for a Trust Deed.

Trust Deeds work in the same way as an IVA – you pay an agreed sum each month that is shared amongst your creditors, they can’t contact you, and any leftover debt at the end of your Trust Deed term is written off.

Debt Relief Order (DRO)

A DRO is a good option for those facing financial hardship with no assets and little income.

For 12 months, you make no payments, but your creditors freeze your interest and don’t contact you.

If your finances haven’t improved during this year, you may be able to write off your unsecured debts.

Bankruptcy

If you have debts but no realistic possibility of ever paying them off, you may need to declare bankruptcy.

Bankruptcy has an unfair stigma attached to it as it may be your only way of getting a financial fresh start. That said, it is a serious financial situation that should not be taken lightly.

Sequestration

Sequestration is the Scottish version of bankruptcy.

If you have little income and no valuable assets, you may be able to apply for a minimal asset process bankruptcy (MAP). A MAP is a quicker, cheaper, and more straightforward version of sequestration, so worth considering.

How far back can it be claimed?

A registered landlord or local authority can chase you for unpaid rent as far back as six years. 

Will it affect my credit score?

Rent arrears alone won’t affect your credit score, but the legal action that comes from rent arrears can.

This is because companies use your credit file to see if you are a ‘high-risk’ customer – someone who might have difficulty paying their bills on time. If you have a CCJ for any debt, including council rent arrears, you have had such trouble paying back your debt that someone had to go to court about it.

Understandably, companies are going to be reluctant to give you credit!

After 6 years, it is no longer visible on your credit report, and you should find it easier to get credit again.

Need additional guidance?

If you need additional assistance dealing with these types of debts and potential eviction, it is best to speak with specialists who provide free advice, like Shelter.

There are several other charities in the UK that offer free debt counselling services and free financial advice. Their advisors will be able to walk you through your options and find the best solution for you.

• StepChange
• National Debtline
• Citizens Advice
• Debt Advice Foundation.

References

1. Big Issue – Council tax debt is spiralling across England as households struggle with cost of living crisis