If you’re behind on council tax payments, you should focus on how to pay off council tax debt as soon as possible. Council tax debt is a high priority debt in the UK. Clear your debt by making repayment arrangements.
What Is Council Tax Debt?
Council Tax debt is a priority debt and must be paid off before any other type of debt. Councils will let you set up a payment plan if you are in debt. If you don’t pay it off, bailiffs may recover your property.
Understanding how to pay off your council tax debt can help you to avoid further problems.
Read on for a guide to paying off council tax debt.
- – Council Tax Debt.
- – Why do we pay council tax?.
- – Understanding Overdraft Debt.
- – How to pay off your Overdraft fast.
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How People Get Into Council Tax Debt
It’s very easy to get into council tax debt. Whilst many debts are optional, everyone’s expected to pay council tax. Council tax isn’t like a loan or a credit card, but is actually an essential bill that’s paid by both tenants and homeowners. Whether you own your home or rent it, you will be expected to make council tax payments every month.
If you can’t keep up with your council tax payments, you’ll progress through a warning system. Your first missed payment results in a warning and a need to pay within 7 days. If you miss this second deadline, you’ll receive a second warning. You won’t get a third warning, so if you can’t pay your bill within a week of the second then you’ll lose your right to make monthly payments. Instead, you’ll become instantly responsible for paying the year’s council tax in full.
Warnings don’t fade until the next financial year. If you get one warning in August and a second in December, the December one will be your second warning. If you’ve been late with payments twice in one year, your third missed payment will automatically result in you owing the annual figure.
Consequences of Council Tax Debt
If you get into council tax debt, the money could be taken straight from your wage or from any benefits payments. Local authorities have the power to take this money before it even reaches you. If you’re struggling with council tax debt, you should be aware that your income could drop as these payments are taken automatically.
Losing some of your income can cause further problems, but is likely to be better than the other action that your local council might take. If they can’t claim money from your income or benefits, they’ll probably send bailiffs to your home. If bailiffs aren’t effective, or your debt isn’t cleared, further legal action may be taken.
You may be forced into bankruptcy. In some cases, you might lose your home or be given a prison sentence.
Council tax debt is a priority debt because of its potential impact. You should focus on paying off any council tax debt before worrying about your loans and credit cards.
Costs Added to Your Council Tax Arrears
Legal action costs money, and your local council won’t absorb the cost. As well as your council tax arrears, you could be held responsible for any additional legal costs like court fees and bailiff charges.
Your debt can quickly mount up, and the consequences of not paying money back can spiral into even bigger problems.
Council Tax Debt Statistics
|Tax Year||Council Tax Arrears Total||New Council Tax Arrears|
As you can see, council tax debt is constantly rising. In the last five years, the amount of new debt has risen by almost 19%, with the total arrears rising 22% over the same period. This shows that not only is council tax rising but so is the number of people in arrears.
How to Pay Off a Council Tax Debt
If you’re struggling with council tax debt, it’s likely that you’ve already lost your right to pay by monthly Direct Debit. If you’re not paying monthly, you’re now responsible for a full year’s council tax bill. If you have the money available, it’s very important to repay this debt as soon as possible.
Dip into savings if you have them. Consider stopping your credit card payments and focusing on paying off your council tax. As a priority debt, your council tax bill should come before most other expenditure. It’s important to do everything you can to stop this progressing any further.
You should speak to your local council. Give them a copy of your household budget, showing your income and expenditure. They might offer a more lenient solution if they see that you’re trying your hardest.
You can make council tax payments online or over the phone. You can also pay your council tax at your local Post Office.
The longer you take to repay your debt, the more costs and fees will accumulate. You’ll also increase the likelihood of further action being taken, and bailiffs turning up at your front door.
Getting Council Tax Arrears Written Off
You shouldn’t pin your hopes on getting any council tax arrears written off. This action is at the council’s discretion and is typically reserved only for those with the most severe financial problems.
Councils may agree to write off your arrears if they’ve seen proof of income and expenditure, and if it’s very clear that you can’t keep up with your bills. More likely, they’ll want to arrange a payment plan or might take you to court if they see fit.
Managing Council Tax Debt
If you’ve fallen behind on council tax payments, seek help as soon as possible. Contact your local council and ask for advice, explaining your circumstances honestly.
The average council tax bill for a Band D property in the UK is around £1,600. If you’ve fallen behind, you’re likely to owe this in one go. Depending on your location and your council tax band, the annual cost of your council tax could be higher or lower. This could be a lot of money to find if you’re already struggling.
Prepare a copy of your household budget, and evidence of income and expenditure. The council may be lenient if you can show why you’ve fallen behind on your payments. You’ll be expected to prioritise your council tax over all voluntary costs, so it’s important to make sure that you’re not paying for an expensive TV subscription or theme park annual pass. Show that you’re sacrificing everything to pay back what you owe.
If your local council feels that you’re not doing all you can, they’ll decide to take further action. They may claim the money from your income, send bailiffs to your house or make you bankrupt.
Other Ways to Pay Off Your Council Tax Debt
As a priority debt, your council tax arrears should be considered extremely important. In fact, they’re so important that this is a rare situation where it’s recommended that you borrow more money to clear existing debt.
Apply for a loan and use this money to clear your council tax arrears. It’s far better to have an unsecured loan than to face legal action from the council. You can then work to repay your loan whilst knowing that your home is safe. If you need to take this route, make sure that you focus on repaying your loan as soon as possible.
Quick Council Tax FAQs
Yes. If the council start legal action, sadly this costs money and will be added to the amount you owe.
Very rarely, councils will write off someone’s council tax arrears. This doesn’t happen often, and will only be an option for those in severe financial difficulty. If you are having sever difficult you should discuss with the local council.
Council tax is paid direct to your local council and they have powers to claim the money back. In the worst cases these include, sending bailiffs round, bankruptcy, losing your home and in some cases prison.
Unless you’re exempt, your council tax payments are essential.
Your council tax rate will be determined by the council according to your property’s band. Your property is put into a band according to its estimated value, and you’re likely to be paying the same amount each year as others in similar homes.
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