Debt Management Plan Council Tax – Payment Guide

Debt Management Plan Council Tax

Your council tax bill is one of the most important household bills you get in the UK. Council tax arrears can have dire consequences. 

If you’re struggling with council tax arrears and are thinking of getting a debt management plan, there are some things you should definitely know about.

In this post, I’ll be discussing council tax debt and whether it can be included within a debt management plan or not. 

Why Should Council Tax Bills be Treated as a Priority? 

If you miss a council tax payment, that means that you’re now in “arrears”. This means that you now owe money to your local council. 

In such a circumstance, it’s very important for you to be proactive. Don’t wait for your local council to contact you. You should contact your local council as soon as possible. You can find out more details about your local council here

Council tax arrears should be treated as a priority debt. This means that you should be worrying about paying back your council tax arrears before you worrying about other unsecured debts such as credit cards. 

Why? Well, it’s because ignoring your Council Tax debt can have dire consequences. 

Your local council will take you to court and you’ll be obligated to pay all of the money you owe at once. Not to mention that you’ll also have to pay court costs as well as any bailiff fees which may apply. This would add hundreds of pounds to your already huge bill. 

If you refuse to pay back the money you owe, your local council can apply to the court for permission to take money from you forcibly. 

This could be by sending bailiffs to your home who would seize your belongings and sell them off in order to pay for your debts. 

It could also be by them taking money from your pay. This is done by obtaining a “liability order” from the court. 

It’s important to note that they can also take money from your benefits such as: 

  • Jobseeker’s Allowance 
  • Universal Credit
  • Pension Credit
  • Income Support
  • Employment Allowance. 

Furthermore, if you hold the means to pay your council tax but are still refusing to do so, then there’s a chance you could even go to prison. 

This is why Council Tax bills are priority debts which should be attended to before all other non-priority debts. 

What if I Can’t Afford to Pay My Council Tax? 

If you can’t afford paying your council tax all at once then you can ask your local council to let you pay them in smaller instalments. 

Just like how a DMP works, you will most likely be asked to make a payment each month regularly. 

You will never be obligated to pay more than what you can afford. 

If your financial circumstances change and you feel you can’t afford the payments that you agreed upon, you can contact your local council to ask them for a reduction in your debt repayments. 

If you’re still facing trouble, you can seek debt advice from an independent debt charity such as Stepchange or National Debtline

They will assess your financial situation as well as the issues you’re facing and suggest to you the best course of action that will lead you to become debt-free.

Fill out the form to find out more about debt solutions:

What Happens if I Miss a Council Tax Payment? 

If you miss a payment to your local council, you will be sent a reminder letter about 2 weeks after the date on which you missed it. 

If you respond to it and pay within 7 days, it will be cleared and you will be able to continue making payments as usual. 

If you don’t pay within 7 days, you will be sent a ‘final notice’ which will tell you to pay all of your council tax for the rest of the year all at once. If you don’t comply, then your local council will start legal proceedings to get a liability order against you from the court. 

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. 

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.

Fill out the form to find out more about debt solutions:

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. 

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. 

creditors home


Council tax repayments can definitely be difficult for a lot of people but it’s important to note that debt management plans cannot address them.

If you’re facing trouble paying your council tax, contact your local council.


Do you know your debt free date?
Do you know your
debt free date?
  • Affordable repayments with an end date in sight
  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring