How to Deal with Council Tax Arrears

Financial Difficulties & Debt Solutions

Feb 10, 2009 Asa Ghaffar

Council tax arrears usually stem from financial difficulties. As council tax is a priority debt, balancing household bills is a must. Can a debt solution help?

Council tax is a means of collecting taxation based upon the value of property. Whilst some properties are exempt and certain people are entitled to reductions, the overwhelming majority of people are legally obliged to pay it or face imprisonment.

The Rising Cost of Council Tax

Council tax rates have been rising above the rate of inflation for well over a decade and this year is going to be no exception. The regional breakdown of the Local Government Association (LGA) shows that most areas of the country are expecting council tax increases of between 3.5 and 4 per cent in April 2009. The highest rises are expected to be in the Midlands.

How Council Tax Arrears are Dealt With

Ensuring that council tax payments are made punctually is a priority. If someone with financial difficulties doesn't pay-up or contact the council to tell them when payment can be expected, a reminder with regard to the council tax arrears will be sent within 7 days.

Should council tax not be paid within a further 7 days, the local council can ask the Magistrates Court to issue a liability order. This allows them to garnish any council tax arrears directly from wages or state benefits. It also allows them to utilise the services of the court bailiff.

The Magistrates Court can send people to prison for non-payment, but this only tends to happen to those that refuse to pay. Always stay in touch with the local council and keep them fully informed of personal circumstances.

Why Have Council Tax Arrears Occurred?

If financial difficulties have occurred as a result of involuntary redundancy, old age or disablement, check to see if council tax should have been payable in the first place. If council tax payments were incorrectly asked for, any court claim for arrears can be reversed and over-turned.

The Correct Council Tax Band

Those struggling with council tax arrears should check that they were in the correct council tax band from the outset. This could help alleviate financial difficulties as there remains a possibility that a liability order could be over-turned as council tax arrears cannot be collected if they shouldn't have been charged in the first place.

Financial Difficulties and Debt Solutions

If struggling with unsecured debts, such as bank loans, store cards, credit card debt or personal overdrafts, it may be advisable to pursue a debt solution. A debt solution, such as an Individual Voluntary Arrangement or debt management plan, will help to reduce monthly repayments. Debt solutions will free-up money to help clear any council tax arrears.

If council tax arrears are a problem, it is imperative that the person struggling with financial difficulties gets in touch with the council to discuss a repayment plan. Don't struggle with unsecured debt. Identify a suitable debt solution to reduce monthly outgoings and create funds to help clear any council tax arrears. Always seek debt counselling before proceeding with any debt solution.

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