Council Tax Arrears - What Can Happen?

If you find your council tax bill in arrears, there are various procedures which will come into play depending on the stage of your arrears. As with all debt problems, the best advice is to tackle it early and seek expert help!

You will firstly get a reminder notice if you are late with a payment, giving you seven days to bring your account back up to date. If you fall behind again, after bringing the account up to date, you'll get another seven-day reminder. You are only allowed two of these reminders a year - a final notice is issued on the third instance. The Final Notice asks for the whole balance to be paid in full and will, again, give you seven days to pay. You'll no longer have the right to pay in monthly instalments by that stage, unless you telephone the council immediately and agree to set up a direct debit.

If you don't - or can't - pay that final bill, you'll be issued with a court summons for a liability order hearing. This formal document will inform you of the date that the court will be considering the application and the sum that the council seeks to recover, along with any associated court costs. It's worth noting that this takes place in a Magistrates' Court, so it won't alter your credit rating, in direct contrast to any legal actions taken in a county court.

It is your right to attend the hearing and give any evidence as to why you believe the liability order shouldn't be granted, or you can accept it and not need to attend. The court can't take into account your actual ability to pay the bill and court costs however, simply your liability towards them. For this reason you'll need to speak to the Council again afterwards to arrange a repayment plan.

If you don't stick to the repayment plan, the council is legally able to have money directly taken from your earnings or benefits (known as attachment of earnings or benefit). They can also call in the bailiffs, which may add considerable additional costs to your outstanding debt - or they can make a statutory demand for your bankruptcy or even have you sent to prison for failure to pay.

To avoid such scenarios, as soon as you anticipate problems with late or missed payments contact your Council. This shows that you are actively taking responsibility for the situation and they will do a review to see if you are eligible for any discounts, benefits or exemptions which may reduce your annual bill. Even if you aren't eligible for any such benefits, the council may suggest some options to help minimise the impact of the resultant enforcement actions of failure to pay. For example, you may have had a Final Notice of payment which has taken away your option for monthly installments, but if you agree to set up a direct debit payment this right can be returned to you.

There are also special council tax schemes which give extra help and support to customers with particular needs, eg: disability or age related. This can also be set up on behalf of a friend or relative.