If you owe council tax arrears, you shouldn’t hide away from paying your council tax bill. There are ways to get out of these debts in a comfortable and affordable way, such as using an IVA. And there may be times when you can write off your council tax debt completely. 

Stick with us as we discuss everything you need to know about unpaid council tax and how you can fight back against your local authority. 

What are council tax arrears?

Council tax arrears accumulate when you miss a council tax payment and have a debt. Your arrears are classed as a priority debt and will need to be paid. 

If not, you could face court action, bailiffs and you could even go to jail for up to 90 days if you willfully neglect or reject making council tax payments. But getting sent to prison is rare. 

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What happens if you have arrears?

If you have council tax arrears, the council will write to you and say you need to pay within 7 days. If you ignore your council tax arrears, you will receive a final notice asking you to pay a full year’s council tax or face legal proceedings. And the judge might ask you to pay as well…

Ignoring a judge’s instruction can result in a visit from a debt enforcement agent. These agents have to give notice before turning up and an opportunity for you to pay.

Further silence can – although unlikely – result in a prison sentence of up to 90 days.

How to deal with council tax debt

Deal with council tax debt by being proactive and never hiding from the problem. We get it, you don’t want to confront the debt because it’s scary. But not being proactive can cost you money and stress.

Search for free advice from relevant charities for immediate support and guidance. 

The easiest way to deal with council tax debt is to pay it off in full before it escalates to legal action. Alternatively, you may be able to negotiate a payments plan to spread out the cost of the debt. If you agree to this and miss a payment, the council will send a letter to your house and threaten court action again. 

What to do if you are taken to court

If it does go to the courts and the judge sides with the council, they will issue you with a liability order asking you to make arrangements to pay it back. Again, you’ll have an opportunity to negotiate repaying your council tax arrears with a repayment plan. 

Avoid paying bailiff fees!

Communicating with the council is recommended because if you fail to pay, the council will send enforcement agents (also known as bailiffs!) to come to your house and collect council tax payment and/or valuables. 

They will charge you an initial £75 just to write to you, and then give 7 clear days to pay or they will start debt enforcement with further fees of £235+. 

They may choose different enforcement actions, like trying to get the money directly from benefits like employment and support allowance.

How to clear council tax debt

If you want to clear your council debt with affordable repayments, and you are unsure what you can afford or how to go about it, there are people who can help with free debt advice.

bailiffs advice

Debt charities are trained to help with council tax debts across England, Wales and Scotland. They will help you communicate with local authorities and come up with a payments plan you can comfortably afford by helping you budget accurately. 

Pay council tax with their free support by finding the charity that’s right for you!

How to get council tax debt written off

You can get council tax written off as part of a bankruptcy application. You can also get council tax debts written off within some other debt solutions, such as an IVA or DRO:

  1. Individual Voluntary Arrangement (IVA)

An Individual Voluntary Arrangement (IVA) is a debt solution where multiple larger debts are consolidated into a legally binding payment plan typically lasting five years. Although the debts remain separate, you make one monthly payment which is proportionally split between all creditors/councils. The IVA is made by a certified insolvency practitioner who communicates with your creditors and any councils. 

Once the IVA term finishes all outstanding debt is wiped, meaning you can wipe some of your council tax debt once the IVA has finished – along with any other debts named within the IVA.

  1. Debt Relief Order (DRO)

Another debt solution that could help wipe all your council tax debts is a Debt Relief Order. This is a solution for people with less than £50 disposable income each month. The DRO prevents creditors and councils from chasing a debt for 12 months. 

After this period, if the financial circumstances of the debtor have not improved, allowing them to pay council tax debts comfortably, the debt is wiped immediately. 

Another way to not have to pay!

Another way you will not have to pay council tax debts in England or Wales is if the debt is older than six years old and you have never been given a liability order to pay. In this situation, the debt is likely to be Statute Barred

Simply put, the council can never take you to court, and subsequently, you will never face a bailiff visit and can never be forced to make payments.

What about Scotland?

In Scotland, things are a little different. Their equivalent to Statute Barred exists, but it doesn’t include local council tax debt. Instead, you would have to wait 20 years for the debt to become unenforceable. 

You can contact your local authority to tell them the debt is too old to be enforced using this letter template!

What happens to council tax debt when someone dies?

Council tax debts can be paid through the deceased’s estate, or they might have to be paid by anyone else living in the property, even if they were not named on the account.

When someone dies, their debts are usually paid from what they leave behind. And if they don’t have enough money to pay their debts, the estate is termed as insolvent and debts are paid in priority order. It is possible that a debt will die with the person – but that’s not exactly how it works for council tax. 

Council tax debt after death

If you lived with someone who paid council tax and you were not named on the bill, in the event of their death, you will be liable to pay the local council back.  

Note: If you are now the sole occupier of the property, you will be eligible for a reduction. People with a low income or on state benefits like universal credit allowance, income support or pension credit may qualify for a reduction too. Contact your respective council for information on reductions. 

Search more answers to council tax FAQs

If you want more helpful guides and answers to questions relating to council tax debt, look no further than Money Nerd. 

We discuss and dissect every aspect of being chased and made liable for these types of debts in our dedicated council tax debt hub.

Take a look now and find answers without the jargon!

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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